Source: Maurice Jackson for Streetwise Reports 10/27/2020 In this interview with Maurice Jackson of Proven and Probable, the CEO of Hot Chile provides a detailed look into current operations on its copper-gold prospects in Chile.Maurice: Joining us for our conversation is Christian Easterday, the CEO of Hot Chili Ltd. (HCH:ASX). Glad to finally have an opportunity to speak with you and to share the value proposition before us in Hot Chili, which has just announced a maiden resource on a world-class copper-gold discovery. Before we delve into the exciting news you have for current and prospective shareholders, Mr. Easterday, please introduce us to Hot Chili Ltd. and the opportunity the company presents to the market. Christian Easterday: Hot Chili has been toiling away for several years over in Chile on the coastline, some 600 kilometers north of Santiago. And we've consolidated a major copper super hub combining quite a number of our key assets. Our original and first exciting discovery, [which] we made it along the coastline was Productora [view here], some quarter of a billion tons of copper and gold sitting very shallow, an open-pit resource that we completed a large amount of work on back in the last cycle where copper was doing well. And I guess, over the last few years, we've transformed ourselves. And that was off the back of being able to secure an agreement to acquire 100% interest in a very, very exciting discovery that was made only 14 kilometers from our key asset. And that was the Cortadera porphyry discovery. The Cortadera was a private discovery that was relatively unknown to the rest of the world. And it was hiding some world-class drilling intercepts that they'd been walked away and there was no close-out drilling. So we put a deal together that allowed us to secure that asset at the beginning of last year. We commenced drilling that project in April of last year. And we started producing our first world-class intercepts, 1,000-meter intercepts from surface at 0.5% copper and 0.2 grams per ton gold. And since that period, we've recorded some six of the world's top 25 drilling results from Cortadera, which has shot it to quite an enviable position within the global copper space. So last Monday was a very big milestone for the company. We were able to jump our resource base from a quarter of a billion tons to some three-quarters of a billion tons. And now we're sitting here in a very, very strong position on the ASX really, with no other ASX copper peers alongside us. And we have a resource base, now, of 2.9 million tons of copper, 2.7 million ounces of gold, and some molybdenum and silver credits thrown in there—so a very, very strong position, sitting with an asset that looks like the next step is going to push the company toward one of the very, very few known major companies holding a tier-one copper asset. It's very, very exciting for the team, the company, and for all of our shareholders to have been able to achieve this. Maurice: Well, I'm smiling ear-to-ear just like you are right now. Hot Chili has a multitude of catalysts and successes here. And I know you're delighted and so are the shareholders. To set the stage for today's interview, you and I had a discussion last week regarding one of Rick Rule's mini famous quotes regarding the differences between investing in gold and copper. Would you mind sharing that with us? I thought it was quite intriguing. Christian Easterday: And I'm not sure I've got the facts exactly correct, but he told me, "Christian, you invest in gold as a shareholder to buy your family its next holiday. But you invest in copper for the long-term to buy your family a holiday house." So very, very different investment space, very different time frames, and almost an order of magnitude and difference in terms of value and capital required to get a copper project off the ground in relation to a gold project, in general. We set ourselves on a strategy to be a junior that could break into that very elite class of projects at tier-one status; some $US35 billion in-ground value generally is the marker in the sand on those assets, and five million tons of contained copper and above, which very, very few companies hold that have not been taken out by a major or have a major that has a controlling interest in. Rick very much knows this space. And I believe that he was one of the early supporters of Ross Beatty, and the fantastic wealth generation period that Ross went through where he picked up assets in a down cycle over in Chile, and put these large assets together, and simply enjoyed an extremely profitable period as those assets turned into multi-billion dollar assets from acquisitions that were in the sub-$100 million space. So it is a space [where] you look at big, big value numbers and big capital numbers. And there's no better place to be than to be developing a large scale asset in Chile, which is the home of big copper, and where 30% of the world's copper comes from, from these top deposits. Maurice: Well, it appears that there's a new lineage of wealth generation may be right here before us. To truly appreciate the opportunity before us in Hot Chili, we should first consider the macro-picture on the supply-and-demand fundamentals for copper, as this is a huge component of the value proposition that Hot Chili presents to prospective shareholders. Mr. Easterday, share with us the projected outlook for copper in the next 25 years. Christian Easterday: Wow. Well, the next 25 years is quite a time frame, Maurice. We generally, in this market, are quite short-sighted in terms of what does the next six months or year look like? So I'll address short, medium and long-term. The short term, I'll be very honest, is anyone's guess. In such a volatile global market with a global pandemic, a once-in-a-hundred-years pandemic, upon us, there are quite many things to be concerned about and there's also quite a list of things to look forward to. I've certainly been watching some of the fundamentals behind the medium- and long-term view mapped to 25. And it looks very strong. We're in a changing world that is pushing toward renewables, and electrification of the world is key to that. So not just the renewable energy space, but the EV (electric vehicle) space, in terms of automobiles, is going to transform copper consumption going into the long term. I think that most people know that macro story and it paints a very good picture for players that are in the long-term copper business with large assets, as opposed to the high-grade, short life more associated with a gold investment profile. We certainly have that to look forward to. Your key people in the industry—the Robert Friedlands that are masterful at talking their book—are very much not that thematic and know that they're holding the assets that are undoubtedly going to receive extreme value transformations over the long period. But if we move to the medium term, which is where I think most of the copper players are positioning and most of the copper majors are trying to gobble up most of the large assets in the world, I think that you look out in the one- to two-year space and it looks very strong, particularly for a global recovery upon a vaccine being introduced to get the market moving. But if we can look in the short term and qualifying it with what I said earlier, the space is fraught with uncertainty. But interestingly enough, this has happened three times in the last hundred years. Bull markets, not just across gold, seem to follow a precursor event, and the precursor event is often a bit of a stall in the global market, associated with the Great Depression, associated with the Asian crisis. And this has happened before—when everyone thinks that the world is about to shatter to a halt and Dr. Copper is one of those commodities that is a barometer for global growth. It's interesting that we see some of the largest bull runs in the commodity space that the world has seen. And we're seeing that now. We're seeing a real shift in the purchasing of copper from the Chinese, and a real scramble to get ahead to get people's hands on stockpiles. So we've seen a real rise in the amount of consumption going on, at the same time as a pandemic is sort of choking off the ability of the copper industry to respond. And against all of that, a real fundamental problem with the copper industry is global discovery. The global discovery has four major copper finds around the world that have fallen off a cliff since 2014. So to be sitting here with one of just two major copper discoveries globally, really since 2014—and we have Marimaca, which was discovered and recorded by S&P Global in 2016; a smaller oxide-copper discovery and very good oxide-copper discovery in Chile also. But really, Rio Tinto and Hot Chili are the beneficiaries of the two most recent copper discoveries we know—for Rio Tinto, over here in western Australia, and of course, Cortadera, which was just announced to the world last year, and now is culminated in a first resource of some 450 million tons from surface. For Hot Chili to be sitting in that space, and with these problems, that supply of copper is being choked off by a real decline in global high grades, and a decline more importantly in new copper supply—new copper supply that can make that growing demand in the world. Maurice: And speaking of copper, the company just released your maiden resource [view here] on the Cortadera Copper-Gold Project, which has placed Hot Chili in an elite category among your peers. Sir, walk us through the maiden resource, because this is truly an eye-opener! Christian Easterday: It's not every day you drill 17,000 meters of drilling, and in less than one year, on top of 23,000 meters of private drilling that was undertaken. We're talking about 40,000 meters of drilling. And that's produced nearly half-a-billion-ton initial resource on Cortadera. It speaks to the sheer potential of this deposit. We haven't closed out the discovery zone. The discovery zone is some 2.3 kilometers long, comprising three porphyries from surface and extending to almost 1.2 kilometers vertical depth. So these are vertical columns that the company has just started getting its teeth into. And if it wasn't for the pandemic that hit the world this year, we probably would keep continuing to drill and pushing that discovery toward what we believe is the ultimate potential of copper equivalent (Cu eq), one billion tons. So we've gone early with the resource, and because of the quarter-billion tons that we had in resource base at our Productora asset some 14 kilometers away, what we've been able to do is bring together the Costa Fuego project that we now refer to—which is a low-altitude play, 800 meters altitude. The Pan-American Highway goes right through the middle of us, and a cluster of deposits that accounts for some three-quarters of a billion tons at about half a percent copper equivalent on all deposits from surface. The Cortadera is certainly the centerpiece. Most people know that we have a high-grade core that we discovered only a year ago. It is supported really by about nine drill holes, and is already over 100 million tons at a very strong grade, which certainly competes with some of the biggest underground copper mines in the world. So, a lot to be excited about in the next phase of growth with Hot Chili. But certainly you go early with the preliminary resource and you come out with Cu eq half a billion tons within a year with very little drilling, I think people can see the ultimate potential of this deposit and where it goes next. Maurice: I admire the intangibles just as much as the tangibles, because the intangibles, they're not discussed in the resource. And I'm referring to the commercial success and the business acumen that define the success of management and the technical teams respectively. You have to tell us, how were you able to acquire this project? Because it just seemed to come out of nowhere. Christian Easterday: Look, I'd love to tell you we've been a company that just turned up yesterday and have had this amazing success, and we sit with the largest copper resource base on the ASX now and one of the largest gold resources—not forgetting we have 2.7 million ounces in gold as a credit. But look, when we step back to when we founded this company in 2008, we were privately backed by our chairman, Murray Black, to go over to Chile and try to break into the copper sector there as a junior, which is a very, very difficult thing to do. Chile is owned and dominated by the major mining companies in the world. So doing deals in Chile has always been viewed as expensive. They have a use-it-or-lose-it policy, which makes it hard to be able to break in and get a good land position. The story of Hot Chili is one of grinding it out and persisting and developing very strong partnerships in-country. It took many, many years of me living over there and refusing to leave some of the companies alone until they would do deals with me, probably just to get rid of me. I suppose persistence is part of the Hot Chili DNA and deal-making is one of our biggest strengths—being able to partner with some of the major mining companies and also some of the very large high-net-worth families that control all of the leases outside of the major company. So we go back to a period where Hot Chili had a very great success out of its ASX listing in 2010. Three months later, we hit a great discovery in Productora. And that drove a lot of value in the company. And we pushed that through, and we were one of the stars in the market in the copper space back in 2013–'14. And then, as most people know, the commodity market hit a bit of a brick wall. The copper price fell off a cliff, and that dried up the amount of capital available to invest in big copper. So again, speaking to our persistence, it was sort of four or five years of being on life support from our major shareholders, including the likes of Rick Rule, supporting management, and supporting a vision to build a major copper play on the coastline of Chile at low altitude. So that was what kept us going and why we never ran away. We had the backing of some very reputable people. And so we sit here today. We used to be among 40 peers on the ASX in the copper development and exploration space, and I couldn't put names on my fingers at the moment. Probably less than five peers, and now we're the largest through that persistence. But to get to the crux of where we're going with the question, Maurice, it was a few years ago that a report fell off the back of the truck so to speak. And we found out about this private discovery, that it occurred, and when the results of that short report hit my desk and I looked at this thing, my eyes nearly jumped out of my head. And I was looking at SolGold Plc (SOLG:AIM) drilling intercepts, near one-kilometer intercepts from surface. And when we got our hands on the data, without the knowledge of the owners of this project, it had been handed back to the Corella family in Chile—a very, very wealthy family in Chile that operates mines and owns department stores and a portfolio of 400 retail properties and business chains across Chile and Spain. That group had been given the project back and we were looking at the data. The key thing that I realized was this deposit had been walked away. This discovery did not have that closeout drilling. And we were looking at something that was a blank canvas. So they had put an estimate on this thing. And I, not for once, believed that estimate was representative of what was sitting there. So we went about two years of trying to [convince] the Corella family that this naturally should sit with Hot Chili to be able to bring this project forward, to be able to apply heavy investment into this, and for the township of Vallenar and that local community to be able to unlock a major copper development on the coastline and employ a lot of people. [That is] something that most Chileans hold true to their heart, that it was two years of negotiating with the Corella family. And really, it was probably a case of them telling me and my key legal adviser, Jose Ignacio, just to go away: "We don't sell assets. We don't sell assets to BHP or Lundin. Why would we sell an asset to you?" It was really about a relationship build and most of the deals that I've done in Chile are years in the making. And so two years, while we're watching our share price get ground down. Our master plan is to bring Cortadera together with Productora. So we were able to pull off a US$30 million deal over 30 months, in scheduled payments, for 100% acquisition. And I remember doing this deal back in February of last year. And at that point, our $250 million company was sitting at $10 million value; we were at $0.01 a share. And I think most people were stunned by what they were seeing with the results we showed off this private discovery. But at the same time, we were aghast with, how in the hell is Christian and Hot Chili going to be able to afford this project? And it's funny how life works. You take on an opportunity and you spend all of that time trying to get that opportunity. And most of the people in Hot Chili were sort of holding their breath for what happened next, once we started drilling it. And to have drilled our first pass RC (reverse circulation) drilling program to confirm that the drill results on the diamond holes that were at surface. The results were real and the assay data could stand up to scrutiny. And then to turn on a diamond drill rig in probably about May and drill one hole that looks good; we went for an extensional hole first. And then again, as we were compiling the data on this private discovery, we came across the reports from a very well esteemed porphyry expert that had been guiding this team on the Cortadera discovery. And his final report to his boss was probably trying to convince his boss to keep the asset. We should keep drilling was what we think; we can see that the main porphyry is now, gee, nearly 800, 900 meters long and 600 meters wide, and vertical over 1.2 kilometers. But back then, it was the early beginnings of Cuerpo Three, which means body, body three out of the three major porphyries at Cortadera in the discovery. And it was, "This thing is getting a higher grade. Give me some more holes. We'll test this concept." So, unfortunately, that guy and that team did not get to test that concept. And as soon as I saw that, I asked the team to turn the mast vertical and I want to drill down this thing and see whether this thing is getting a higher grade at depth, and the rest is history, as they say. The 750-meter intercept is one of the best intercepts going around in the last two years. But we hit a near-200-meter zone running at nearly a 1% copper and 0.5 gram gold. And, wow, did our eyes open at that point! So that's when we were speaking to guys like Steve Garwin about this, and we're very, very lucky to have Steve Garwin, who's now one of the key architects of the Cascabel discovery and the growth of that asset with the whole SolGold team, which has done an amazing job building a 10-million-ton copper play with some 23 million ounces of gold up in Ecuador, and is one of the leading discoveries globally. So to have Steve Garwin come over and say, "I'll help out and I'll lead your team," to guide us through how we're going to model this and target this—I guess the proof is in the pudding, six world-class intercepts now and a maiden resource of nearly half a billion tons within a year, it speaks volumes. Maurice: This is exactly why I always reference the virtues of having proven management. What I heard in this narrative right here, I heard resiliency. I heard determination and vision. And that now produces success not just for the company but the shareholders. And that's what it's all about. You have to have champions with a proven pedigree of success, and that's exactly what we have right here before us in Hot Chili. And then you blend that in, of course, with the maiden resource. You alluded to this before the commentary, there were the gold credits. Germane to this discussion should be the gold credits. How do they fit into the organic growth of the company? Christian Easterday: Look, gold is a very, very key commodity for us. Obviously, copper is the dominant value that we hold within our portfolio of deposits in Chile. I see a lot of commentary in the gold sector about the gold majors starting to look into the large, porphyry, copper-gold space and it's very real. I was a gold geologist for many, many years with some of the Australian notable companies, but also the Placer Domes of the world, and cut my teeth in gold. So back then, I remember I used to go to a biannual conference that talked about the biggest gold discoveries in the world, and gee, over my 20-odd years in this industry, I've seen, at the start of my career, where we used to find plus million-ounce gold deposits. I remember you couldn't get into this conference unless you had at a minimum a discovery. I think it started at probably about 3 million ounces of gold. Gee, and that New Generations Gold Conference held over here in Western Australia, there are not many gold deposits that sort of sitting in the plus-million-ounce gold space now. The gold industry is also having a tough time finding large accumulations of gold in one deposit. It's probably pretty natural that they start looking over into the copper-gold space, where the Newcrest Mining Ltd. (NCM:ASX) companies of the world have fantastic deposits like Cadiam and we spoke about SolGold. Twenty-three million ounces of gold sitting in Alpala at the moment and obviously some very exciting exploration upside that some playing out at the moment. But to have a 23-million-ounce gold deposit just on its own, gee, I think that probably marries with one of the biggest deposits that the gold space has been trying for many years to get up and developed, which is Pascua Lama. It's sitting at 4,200, 4,600 meters altitude, with the border of Argentina and Chile going through the middle of the pit they've tried to develop. That thing is what?—$6 to $7 billion, now stated development value for 23 million ounces of gold. So you get that as a credit now in a porphyry copper-gold deposit. And importantly, you've got the primary value attribute, which is the copper, which if you want to look at it from a gold perspective, wow, you're getting all your gold for probably, I don't know, the lowest quartile of production costs in the industry. So these deposits are immense stores of metal, and gold is one of those things that now has the gold space looking into large, porphyry copper-gold just to be able to get their hands on big gold deposits, and something that the gold industry is finding hard to find is tier-one gold deposits. The five-million and the 10-million-ounce-plus deposits are very rare. Maurice: Is Hot Chili fully permitted, licensed on the Cortadera? Christian Easterday: Yeah. I guess we're not an overnight success as we just discussed, with the persistence of Hot Chili. It takes a bit to knock the Hot Chili team down. So we've been at this for a while and that means, outside of your question on permitting—which is a yes, we're fully permitted—all of the leases that contain all of our deposits or resources, mineral resources now, and all of the deposits that will be mineral resources shortly, and added to Costa Fuego's growing inventory, they're all on granted mining leases that we make sure that we had to secure all of the titles. But in terms of permitting, gee, having had spent US$100 million on our Productora asset, which is now just a very large satellite for Cortadera, 14 kilometers to the west, we've spent a lot of money on a pre-feasibility. I spent many years securing infrastructure access agreements with our major partner at Productora, which is the Chile CMP CAP group, one of the big three. They're the largest iron ore miner and steel fabricator and infrastructure business in Chile. So we brought them in for a 20% interest in Productora, into work on that joint venture, and they handed us the keys to the coastline of Chile. Surface rights, easement corridors for water pipelines, for access to water from the coast for electrical easements. Hot Chili has spent a lot of time setting up the infrastructure. And some of those access agreements—those things take eight, 10 years, generally, to be able to secure in Chile. And, in the background, we've been trying to secure our maritime concession on the coastline to be able to extract sea water. That's been seven years in the making and hopefully, we're not far off—have been one of the very few juniors in Chile to have a maritime water extraction license. So, Maurice, it's a very good question, because a lot of people don't see all of the work that goes into building a mine. Building a mine is a very, very hard thing to do and it's getting harder. And so your social license to operate and have all of those things in place mean a great deal to any large developer hoping to transition into production, particularly into the major space. Maurice: Before we leave the Cortadera, there is a multilayered question I have here for you. What is the next unanswered question? When can we expect the response? And what would determine success? Christian Easterday: I think that's a big question for everybody having. The dust will settle a little on the resource that's occurred, but the market is very forward-looking. So I imagine the next question for everybody is, "Where's the next big drilling intercept going to come from?" And most people know that we're drilling some very big potential at the moment. We're not just sitting and incrementally growing the resource that's still not closed out. We're answering big questions, such as we just focused on drilling Cuerpo Three. And we've discovered this big high-grade core that gives us not just a grade open pit situation, but a potentially very large high-grade underground development opportunity. So what happens when you drill Cuerpo Two at depth? We haven't done that yet, and we've got a hole going down and meet that at the moment. And let alone what happens when we get over to Cuerpo One and drill that small little porphyry that doesn't have any drill holes underneath it either. So I think the next question for the market is, "Where's the next real big leg of growth going to come from in this project?" And we even have a drill rig up at a very, very exciting lookalike target to Cortadera, which unbelievably sits two kilometers away—an entire two-kilometer zone that shows a similar footprint to the footprint of the Cortadera discovery that unbelievably hasn't been drill-tested yet. So we just started our second drill hole on that. So I think the next question for the market is, "How does this sort of near half-a-billion-ton play? How does it become a billion tons quickly?" So we're answering that question now. And I imagine over the next few months, we'll be skirting around and drilling all of these big growth targets. And we hope to answer that very quickly. What determines success for Hot Chili? It's at the end of the drill bit. I think that the market wonders where everything goes from here with Hot Chili. We're sitting in a space where we've just defined something, where we're up amongst the North American players that dominate the copper sector on the development pipeline and holding all of the big assets in the world. We're this curious thing, probably, for the North American market. We're a big copper play that's just arrived on the back of a kangaroo. Success for us is being able to play up in the big space amongst the copper developers and aspiring next copper majors that are generally in the $100 million to $500 million space and to be sitting in the ASX where we don't have a lot of peers. It's about translating that value proposition to our market because at the moment, we've just defined probably one of the next very few tier-one discoveries being put to the global copper industry. So, success for me is our next step. It's at the end of the drill bit, and it's about pushing in three million tons of copper inventory to five million tons and doing that rapidly. So to do that, we've got to go and answer those big questions. What happens at depth on these other porphyries? Are there other high-grade cores? Do these porphyries come together at depth like what has happened for SolGold at Cascabel when they started drilling deeper? And more importantly, do we have another one two kilometers away? So it's going to be a very, very exciting probably three months, six months. Certainly, a very exciting year as we answer those questions initially, and we focus on building this resource as rapidly as we can. Maurice: All right, switching gears, let's get into some numbers. Please share the capital structure for Hot Chili, sir. Christian Easterday: You don't go through 10 years in the market and surviving five years of downturn without having a big capital structure. We have 2.4 billion shares on issue and fully diluted, sitting around 3 billion shares. So not dissimilar to where the SolGold guys find their capital structure. But a very wise person said to me, "Is it easier to go from 40 cents to $4, or easier to go from four cents to 40 cents?" The equation is the same. We look at this as, what's the value of the company, the market capitalization of the company? And we are putting a value proposition to take our company, which at the beginning of last year had gone down to $10 million. And we're putting a value proposition to the market to build our company toward a $1 billion market capitalization. That is the aim and that's what sits underneath that capital structure of 2.4 billion shares on issue. And I imagine that most people can do the math on what that multiple looks like at the end of this journey. So our capital structure is around 2.4 billion shares. We're trading, I think, at around $0.048 today or $0.049 today. And since this resource announcement, we've been seeing a huge amount of liquidity in the stock. Yesterday, we had nearly $4 million traded. So certainly, we're getting the attention. And yeah, I think we have a very exciting period ahead for our shareholders, and we're very fortunate to still have quite a decent treasury sitting around $4 million in the bank. And we're advancing well, with option money coming in. And part of the aspect of the Hot Chili story, which is also very important, is we're about to see the first commercial cash flow into our business from a lease mining and processing agreement that we have with the government of Chile. At our Productora asset, we have, a couple of months ago, just commenced mining some of our high-grade material and being able to fill up their local processing facility some 15 kilometers away in the township of Vallenar. And that's been not really about cash flow, although that helps the company out in terms of its expenditure and its working capital position. But more importantly, that's about our relationship with the government and with the local community and safeguarding jobs. And we have an aspiration to build a very large copper production hub. And if we can help out local jobs and help the government out in that community, then it's a win-win for everybody. Maurice: You referenced the treasury. Is that the cash and cash equivalents there, the number you provided? Christian Easterday: Just cash at the moment. So we have a weird situation where our last capital rising put out 0.025 options. And so we have quite an inflow of conversion on those options into shares, which is providing an inflow of cash into our treasury at the same time as we're spending. And hopefully, by the end of next month, we'll see that supplemented with further cash flow injections coming in from that lease money and processing agreement, which we're also in the process of discussing with the government, expanding that agreement. And hopefully, we'll have some news flow coming out on that shortly. Maurice: Well, that's not a bad problem to have some cash flow. Christian Easterday: Whenever we're going to develop a tier-one asset with that kind of treasury and even with those modest amounts of inflow, it's very helpful. And no doubt, we're a junior like every junior. If you get success, and the results speak for themselves, and things are going the right way, the market well supports you as your share price lifts. And it's funny how each capital raising becomes less and less diluted. And more importantly, we go back to where I started this interview with you, Maurice, where I said that the reaction for the Cortadera acquisition was one of amazement, with the drilling intercepts I was saying, and one of sheer terror, and how many shares we would have to put into the market to be able to fund this thing. It's funny that cause of concern has dampened down on volume as we've gone on with this. It's an exercise of seeing an escalating share price being counterbalanced with the number of shares that the company may have to put out to fund this. But we look at multiple funding scenarios and funding options, and we have a very good dialogue with parties that have much broader funding shoulders than Hot Chili. But at the moment in this market, the market has been supporting me very well. And we have the support of several large institutions over here in Australia, not least of all, some of the large shareholders that have carried us through the bad times. Maurice: How much debt do you have, and what is your burn rate? Christian Easterday: We have no debt. We do have a historic debt facility that we took out with our major shareholders with a convertible note. That convertible note has the equivalent of some 200 million pieces of paper against it. But that was an automatic conversion. It converts automatically. I think we have about two years or 18 months left and all of those convertible notes become paper. So a capital structure, you instantly add about 200 million shares to that. But those noteholders, while they hold the convertible notes, they enjoy a quarterly interest payment of 8% that the company can pay out in cash or shares that are eligible that is based on a floating share price at the end of that quarter. So as the share price increases we have to service that note for the next 18 months or so, with an ever decreasing amount of shares to those convertible noteholders. But look, we assume that convertible note is paper, and so you can instantly turn 2.4 billion shares into 2.6 billion shares. And so we don't have a debt instrument with the company, and we have an equity instrument that's sitting on our balance sheet. That is why I always talk about our fully diluted capital structure. Maurice: You've referenced major shareholders. Who are they? Christian Easterday: Our largest shareholder and our spiritual leader of Hot Chili is Murray Black, our chairman. He's the guy that backed me when I was a young geologist that had a bigger ambition in the world to eventually run my own company. Murray's been my closest friend, my biggest ally, and one of the company's biggest supporters. The Kalgoorlie Group, we sit at 10.1%. We used to hold a 19.9% position, but that has been diluted somewhat. So he's still the largest shareholder, and Murray and the Kalgoorlie Group, which I'm associated with, have well over $20 million of hard cash into the company to support it in each of the raises that we've completed over the years. After that, we have some very notable names, one of them being the Taurus Funds Management Group, a private equity group over in Sydney run by Gordon Galt, and represented on our board by Michael Anderson. They've been extremely supportive and share the long-term vision of the company and we couldn't have done this without some shareholders like that. And for the North American market, of course, the Rick Rules of the world and the Sprott Group, which again were instrumental in Hot Chili still being alive and still being here today, to be able to succeed in actually executing this long-term business plan. We also have local large shareholders in our partners at Productora. The CAP CMP group—they not just have 20% of our assets at Productora in an operating joint venture, but they also have a large shareholding that they've maintained on a register. And so some very, very notable names and just sitting underneath the 5% level, we have a growing stable of very high net worth over here in Australia, sprinkled in with a growing institutional presence. Look, so they're not over the 5% line, so I am not at liberty to discuss those names. But I imagine, in due course, we'll see some of the Australian institutional and fund space probably growing their positions in the company. Maurice: Those are some exclusive and reputable names you just referenced there. What is the float? Christian Easterday: We used to have quite a small retail component. It used to probably comprise about 20%. That retail component has grown to probably about 50% or around 45%. So we've seen a movement to retail, small mom and pop investors. And it's represented by how many shareholders. You go back to before the Cortadera deal was announced and we might have had a thousand shareholders. We have nearly 3,000 shareholders. So that tells you a lot. We've probably seen a movement of about 25% of our register towards retail now, but that's not uncommon for an Australian stock or even a Canadian stock in the resource space. Retail has been driving this resource boom or renaissance if you want to call it that. And in Australia, share prices are made and rewrites are instigated and sustained by retail investors and that's been going on for quite a several years. The institutions and the fund space have been taking a backseat to that. They've been instrumental in how the companies have funded themselves going through their rewrites, and some very exciting stories are invigorating the market over here. But it's the retail investors that are driving this. And so the messaging that we have is very much pivoted toward the retail sector and trying to try to give the retail guys what they're looking for. And so the retail space in Hot Chili, or the float in Hot Chili, is probably around 45% at the moment, which means that the major shareholders, which we used to have 56% of the company in the hands of five players, some of the names I just mentioned, now, those five players represent some 28% of the company. So probably tells you a lot as to what's happened with the changing dynamic on our register. Maurice: In closing, sir, what keeps you up at night that we don't know about? Christian Easterday: There are many things to keep a CEO up at night. I'm always extremely interested in my drilling report in the morning, from the two drill rigs on the ground, and hopefully, we'll push that out and have a further drill rig or two on the ground in the coming months. But it's all about what the next 30 or 60 meters of the diamond hole looks like on holes that are exciting, and they dictate the coming year for us. So that keeps me up at night from an excitement perspective. And then from a worrying perspective, I guess it's this ever-changing environment in the market. Watching the news is one of those things that has your head spinning sometimes, especially what's going on in the U.S. with the election, and where that will push global markets. But at the moment, having just gone through such an intense phase for our company trying to produce a very robust resource figure that can be scrutinized by many independents that no doubt will have a look at that in the coming months, I sleep pretty well after not sleeping probably for about 12 weeks and going through that resource so thoroughly that we ironed out every little thing that we couldn't understand or it didn't make sense. And why is the block out grade of the model here and why is the assay right here? These things don't make sense. And spending 12 weeks of my life hunting down every little aspect of that resource that could make that bulletproof and representative of the world-class asset that is coming together. So now, I'm sleeping pretty good, but you do wake up at two o'clock in the morning and go and have a glass of milk and try and make sure that you can get four or five hours of sleep and turn your brain off. So those are the things that keep me up at night. Maurice: And if anyone's questioning your veracity, I can vouch for it that you and I are 12 hours apart and we've been in discussions here in the last month and a half. And whenever I pick up the phone or send you an email, there's a response immediately. Christian Easterday: There's one thing about having your head office over in Perth, where your family is, and having all of your people and your operations over exactly 12 hours out. So all of the people in Hot Chili are quite used to late-night emails and conference calls and very early morning conference calls and emails, etc. So yeah, we run a 24-hour business, and management has got to be switched on 24 hours a day. So you get used to it, Maurice. Maurice: All right, sir. Last question, what did I forget to ask? Christian Easterday: Gee, pretty thorough interview. Maybe we can think about that for next time. And hopefully, I'll be able to give some of your viewers an update, and we can address some of the things. For now, we'll maybe save some powder and keep it dry for our next interview. Maurice: Looking forward to it, sir. Mr. Easterday, please share the contact details for Hot Chili. Christian Easterday: Visit our website at www.hotchili.net.au and you can find us on the ASX:HCH. Maurice: Mr. Easterday, it's been an absolute delight to speak with you today. Wishing you and Hot Chili the absolute best, sir. Before you make your next bullion purchase make sure you contact. I'm a licensed representative to buy and sell physical precious metals through Miles Franklin Precious Metals Investments where we a number of options to expand your precious metals portfolio from physical delivery, to offshore depositories and precious metal IRAs. Call me directly at (855) 505-1900 or email [email protected]. Finally, please subscribe to Proven and Probable, where we provide mining insights and bullion sales. Subscription is free. Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: Disclosures for Proven and Probable: Proven and Probable LLC receives financial compensation from its sponsors. The compensation is used is to fund both sponsor-specific activities and general report activities, website, and general and administrative costs. Sponsor-specific activities may include aggregating content and publishing that content on the Proven and Probable website, creating and maintaining company landing pages, interviewing key management, posting a banner/billboard, and/or issuing press releases. The fees also cover the costs for Proven and Probable to publish sector-specific information on our site, and also to create content by interviewing experts in the sector. Monthly sponsorship fees range from $1,000 to $4,000 per month. Proven and Probable LLC does accept stock for payment of sponsorship fees. Sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734. The Information presented in Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. You should not make any decision, financial, investments, trading or otherwise, based on any of the information presented on this forum without undertaking independent due diligence and consultation with a professional broker or competent financial advisor. You understand that you are using any and all Information available on or through this forum at your own risk. Images provided by the author. ( Companies Mentioned: HCH:ASX, ) from https://www.streetwisereports.com/article/2020/10/27/what-determines-success-for-this-junior-its-at-the-end-of-the-drill-bit.html
0 Comments
Source: Ron Struthers for Streetwise Reports 10/27/2020 Ron Struthers of Struther's Resource Stock Report profiles Discovery Harbour and explains why he believes it offers an opportunity for a major gold discovery in Nevada.I am very bullish on the short term prospects for gold, both fundamentally and technically on the chart. There are records amount of cash on the sidelines because of Covid-19 and election uncertainty. I commented earlier about the inaccuracy of polls and if they are off similar to 2016, that Trump had a slight lead. Right now it has probably moved to Biden as a slight lead. Whatever, it will be close and it could be weeks or months before the final decision on the election is made because of the increased mail-in ballots. This chaos will be good for gold, but no matter the outcome, the fundamentals for gold will become stronger than ever. No matter who wins, we face an unprecedented economic collapse that ensures low interest rates, perhaps negative rates and numerous stimulus and money printing sessions in the next few years. I commented that a stimulus package would not be approved pre-election and that is one reason gold has not broken to the upside yet. No matter who wins, it ensures the next stimulus round will soon come. If Trump wins it will be as previously expected and much higher gold prices. If Biden wins, markets will expect much higher stimulus and spending, sending gold higher at a faster pace. As of the end of September, Gold ETFs have surpassed 1,000 tonnes of new demand in 2020 with 10 months of consecutive increases, matching the pace in 2008 and 2016. Stock markets will continue to face the economic problems and poor earnings On the chart, a nice uptrend is in place, ignoring the oversold condition in March and overbought in August. We have another wedge pattern and when we broke down from the previous wedge in September, I predicted a test of at least $1,850, which we got. The gap up from $1,850 to over $2,000 is now nicely filled, another positive. Momentum remains positive to the upside. Gold is money and it is always investment demand that causes the bull markets. With Covid-19 more investors realize that gold should be part of their portfolio, even Warren Buffet, for the first time. Gold surged $600 this year, so this consolidation is healthy. I believe the next up move will start November/December. Time to buy more gold stocks is now. Here is another excellent Nevada based junior explorer. Discovery Harbour Resources Corp. (DHR:TSX.V; DCHRF:OTCPK; 4GW:FSE). Recent Price $0.10 52 week trading range $0.03 to $0.17 Shares Outstanding 94.3 million, 37% held by Insiders and Institutions (Richard Gilliam 16%) (Palisades Goldcorp and AlphaNorth Asset Management 19%) Highlights:
Management Mark Fields, P.Geo, B.Comm (Hons) President, Director - Fields was the president, CEO and director of Geodex Minerals Ltd. from May 2009 to June 2014 and the president of his own consulting company, MC Fields Ventures Inc. since 2007. He received the E.A. Scholz Award for excellence in mine development for his role as executive vice president of Pine Valley Mining while bringing the Willow Creek metallurgical coal mine into commercial production. Earlier in his career he was involved in the acquisition and development of the Diavik diamond mine for the Rio Tinto Group. Mr. Fields holds a B.Sc. in geology from the University of British Columbia and a B.Comm., (Honours) from Queen’s University. Richard Gilliam, Director and Majority Shareholder - Gilliam has spent 30 years building and operating coal mining companies. He is the past president and founder of Cumberland Resources Corporation, which was one of the largest privately owned coal mining companies in the United States. In March 2010, Massey Energy purchased Cumberland for US$960 million in cash and shares. Andrew Hancharyk, B.Bus.Admin, JD, LL.M Director - Hancharyk is a consultant who was formerly the chief legal officer at Largo Resources Ltd. in Toronto. He was also a director of CVC Cayman Ventures from September 2010 through the RTO by Discovery Harbour Resources. He served as senior legal counsel and consultant for CHC Helicopter Group of companies in Vancouver. From November 2007 to February 2010, Mr. Hancharyk was national policy manager of the TSX Venture Exchange in Vancouver. Rodney Stevens, Vice President, Interim CFO, Director - Stevens is a Chartered Financial Analyst (CFA) charterholder with over a decade of experience in the capital markets, first as an investment analyst with Salman Partners Inc. and subsequently as a merchant and investment banker. While at Salman Partners, he became a top-rated analyst by StarMine on July 17, 2007, for the metals and mining industry. Jason Cubitt, Director - Cubitt has 25 years of experience working with resource companies in various capacities as founder, finance agent and institutional investor. Cubitt is also interim president, CEO and director of Westminster Resources Ltd. and is a principal of Ore Capital Partners. The Caldera Project, Nevada – A New Approach, 100% option The Caldera Project lies in a fertile gold region, at the intersection of the Walker Lane and Northumberland Gold Belts, just 66km WNW of Tonopah, Nevada. It is less than 50km from Kinross Gold’s Round Mountain mine, which produced 361,000 oz in 2019 alone and is a deposit of greater than 16 million ounces of gold. Caldera is a potentially overlooked low sulphidation epithermal-style deposit. Historical operators had mined high-grade veins on a small scale, while previous modern exploration had focused on shallow bulk-tonnage open-pittable targets. Since 2016, Discovery Harbour has compiled all the historical data, and completed detailed mapping and grid soil sampling to identify the deeper source of the high-grade, but discontinuous results at surface. The historical results include rock-chip samples as high as 193 g/t Au, soil samples as high as 1.3 g/t, and drill results such as 7.6 meters of 8.33 g/t Au and 3.0 meters of 37.92 g/t Au over 6.5km of strike length. Historic drilling was at vertical depths averaging less than 100 meters. I concur with management beliefs that the high-grade historical intercepts represent leakage from the boiling zone (where gold grade enrichment occurs) of a low sulphidation epithermal gold deposit. The boiling zone typically occurs at approximately 300 meters depth. The dominant WNW trending strike is mineralized for at least 6.5km with a series of gold anomalies defined by surface rock and soil sampling and historical shallow drilling. Strong alteration, pathfinder elements and mineral textures associated with the low sulphidation epithermal gold model occur throughout the project area. Based on this favorable combination of factors there is strong potential for a significant underground high-grade gold deposit. Discovery Harbour has expanded the Caldera property several times since initially acquiring it in 2016 and it now encompasses over 30 square kilometres. The Company has developed 33 targets and submitted a Plan of Operations to drill-test up to 10 separate sites to the required depth to test the boiling zone where gold and silver would be deposited. I am only going to highlight the targets planned for the first drill round (A through J, shown below) Calista (Drill Site "A") The Calista area contains three vein target trends, oriented northwest at 300° strike, defined by historical prospecting pits, underground workings and multi-gram gold in surface samples. The structure extends in excess of 1.5 km. Historical shallow drilling (10 holes, ranging in vertical depth from 104 meters to 194 meters in this area intersected anomalous gold, but the structures remain largely untested. The Calista area structures are strongly developed with a long strike extent, significant alteration, and associated high grade rock samples. Darius (Drill Sites "B" and "C") The Darius area contains a total of eight targets. There are a number of structural trends that, in contrast to the Calista area, trend more northerly at approximately 340 degrees. Application has been made for a permit to drill two sites in the Darius area. The following results supported its selection for drilling:
Faustus (Drill Sites "D" and "E") The Faustus area contains three targets. Targets within this area demonstrate two contrasting structural trends, one being northwesterly and the other northerly. The Faustus area also marks the southeast extent of a regional magnetic low that underlies much of the Caldera property, which Discovery Harbour has interpreted to represent the alteration zone associated with the low-sulphidation epithermal system. Application has been made for a permit to drill two sites in the Faustus area. Gemina (Drill Sites "F" and "G") The Gemina area is typical of a number of the defined target areas in that it possesses numerous targets based on historical workings, well defined structural zones and strongly anomalous gold results in shallow drill holes. Gemina’s six targets are over a notably long strike length that has been defined through exposures and previous drilling. The alteration zone associated with the structures is broad, characterized by a combination of quartz and chalcedony at various locations. Application has been made for a permit to drill two sites in the Gemina area. In the immediate vicinity of "F" the following results supported its selection for drilling: Highlights of the historical drilling include the following:
Adara (Drill Sites "H", "I" and "J") The Adara area contains eight targets and includes the historical Golden King Mine. Historical drilling intersected sporadic high-grade shallow intercepts, which are interpreted to be associated with west to northwest trending structures. Application has been made for a permit to drill three sites in the Adara area. In the immediate vicinity of "H" the following results supported its selection for drilling:
The Caldera project has exceptional potential and we are about to enter the most exciting time with any junior explorer, the drill testing. There is strong potential for high-grade intersects and that is what the company is testing for at depth. Financial Last financials at June 30th show $16,387 cash and no long-term debt. Since then, on July 20, Discovery closed a fully subscribed non-brokered private placement for $3 million with a lead order from Palisades Goldcorp Ltd. and a co-lead order by AlphaNorth Asset Management. The company issued 54,545,455 units at a price of 5.5 cents per unit for gross proceeds of $3 million. Each unit consisted of one common share of the company and one common share purchase warrant, with each warrant entitling the holder to purchase one share at a price of 10 cents per share for a period of three years following the closing of the offering. Summary DHR has a great management team with past success. CEO Mark Fields oversaw the sale of Geodex Minerals key asset to Northcliff Resources and built the Pine Valley coal mine. Director Richard Gilliam founded and sold Cumberland Resources to Massey Energy for US$960 million. Nevada is one of the top gold jurisdictions in the world and DHR has acquired an exceptional project in Caldera. It is very fortunate that the project was never drill tested at depth for a low sulphidation epithermal gold deposit, giving us this opportunity today for a major gold discovery. Long time readers will remember Franco and Euro Nevada, that were predominately royalty companies. However one of the main reasons for their large share appreciation in the 1990s was the discovery of the Ken Snyder Mine (named after it's geologist founder). Franco and Euro Nevada were 50/50 partners and this turned out to be a low sulphidation epithermal discovery. It was their only mine property as the rest of their assets were royalties. However it had an impact on their stock prices because it was very high grade and profitable. The mine grade ran over 1 ounce per ton gold with 16 ounces per ton silver. The silver covered all the costs, so in effect the gold was 100% profit or just like a whopping 100% gold royalty. I doubt DHR will make a multi million ounce discovery with grades over 1 ounce per ton, although possible. These epithermal deposits are typically high grade though, so it makes the potential for a junior company like DHR quite extraordinary. The current market cap of the stock is low at $9.5 million and no drill speculation has built up in the stock price. There is an abundance of drill targets with 33 identified to date. They will test 10 in this first round of drilling. Drill permits have been submitted and approval could come anytime. Now is a good time to accumulate a position while things are a bit quiet. The stock rallied strongly after the March sell off and has come back down to an excellent entry level with the recent correction in gold and gold stocks. The stock is now down to a support level and also very close to the 200 day moving average support. It is currently not much above the recent 5.5 cent financing. Ron Struthers founded Struthers' Resource Stock Report 23 years ago. The report covers senior and junior companies with ample trading liquidity. He started his Millennium Index of dividend stocks in 2003 - $1,000 invested then was worth over $4,000 end of 2014 and the index returned 26.8% in 2016. He retired from IBM after 30 years in customer service, systems and business analyst, also developing his own charting software. He has expertise in junior start-ups and was a co-founder of Paramount Gold and Silver. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: Charts and images provided by the author. Struthers Disclosure: All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication. from https://www.streetwisereports.com/article/2020/10/27/discovery-harbour-about-to-begin-first-round-of-drilling-at-nevada-project.html Source: Streetwise Reports 10/27/2020 Frank Holmes, CEO and chief investment officer of U.S. Global Investors, says it doesn't matter if the U.S. sees a Red victory or a Blue victory in the presidential election; gold will be the real winner. In this far-ranging interview with Streetwise Reports, he discusses gold's prospects post-election, inflation, stock market performance, criteria to evaluate mining companies, and companies in U.S. Global funds.Streetwise Reports: Frank, let's begin with gold. After a substantial rise in the price of the metal earlier this year, which went as high as $2,036 an ounce in early August, it has since been trading sideways, consolidating roughly around the $1,900 mark. What effect do you think the U.S. presidential election will have on the price of gold? Do you see different scenarios based on which candidate wins? Frank Holmes: Well, you can hit the red button or the blue button, but I'm hitting the gold button, no matter which one it is. You have to sit back and look at macro forces and macro themes to understand gold and the drivers of gold. When we go back 30 years ago, as Pierre Lassonde pointed out at the Denver Gold Show a year ago, China and India represented only 10% of gold demand—6% India, 4% China. Today, however, these two countries comprise 53% of all gold demand. Why is that? Because a rising gross domestic product per capita and purchasing power parity are highly correlated with what I call the love trade, that is gold jewelry demand and gifts in gold. So that's the underlying factor that keeps driving gold demand. The supply side has peaked and outside of recycling, there are no major new discoveries being made and no major deposits coming onstream. So I think this bodes very well for 60% of all gold consumption. Now we get into the fear trade, and that's what really accelerates things—negative real interest rates and unprecedented money printing. The G20 finance ministers and central bankers started their own cartel 20 or so years ago. At the beginning of the century, they were consumed with global trade, the World Trade Organization, China, and, all of a sudden, there's a huge global boom. Gold stocks took off. Bullion went from $250 to $800/ounce. We had this incredible cycle. Along comes 2008–2009 and we go to synchronized taxation and regulation. Today, we have synchronized money printing to fight COVID-19. There is not one country printing money faster than another. They're all taking turns at it. If we take a look at the Federal Reserve's balance sheet and how it's exploded under this cycle compared to 2008–2009, simple math would suggest in the next three years gold could be $4,000/ounce. The other big part is the inflationary number, because it's changed several times. If you use the inflationary algorithm, when gold hit $850 and silver $50, inflation was over 18%, today we have inflation running 8% so gold would be valued about $7,000. So I comfortably feel that in the next three years, in this next cycle, we could see gold double from here based on just the U.S. money printing. SWR: You've looked at broad stock market performance in presidential election years. What have you found? FH: Well, historically, the first two years of a presidential election cycle are very sloppy, some are modestly up. But it's in the last two years that the market usually is on a tear. If it's not, then it usually derails the political party in power, such as we saw with President Obama's election in 2008. During President George W. Bush's last term, his last quarter, we had Lehman Bros. go bankrupt, and then there was just incredible turmoil in stocks and the economy. This is a very different world. Even though we have COVID, the U.S. Purchasing Managers' Index (PMI) is the highest in the world, and that means six months from now, we're going to see higher energy, copper and iron prices. This has been trending up all through the summer. So that remains very bullish. We also track the airline industry very carefully. We have the only airlines exchange-traded fund (ETF) available to investors: the U.S. Global Jets ETF (JETS:NYSE). The Transportation Security Administration used to clear 2.7 million people a day; in April it fell to fewer than 90,000 people a day. Just last week, we went through 1 million, so we're climbing. This is very positive for the travel industry and for JETS, and it's a reflection of the PMI and the stock market being stronger. When you have negative real interest rates, what we're seeing is that it's not just Americans buying stocks because of low yields—and dividend yields are more attractive than what you're going to get from a money fund or a bank—but also you're seeing central banks like Switzerland print negative money. No one's going to buy it, so it buys it itself, and then goes and buys real assets like Apple Inc. When you take a look at what we see now in Japan—this is where capital formation morphed dramatically—15% of the stock market is owned by the government, the central bank. So this is a very different world. What we saw in this cycle, in the past six months, is the Federal Reserve starting to buy bond funds. It dropped the interest rates to zero, but the real cost of capital was running at 14%. So what did it do? It came in and started buying muni bonds. That helped get the pressure off a trillion dollar muni market when bonds are being rolled over. Then it came in and bought corporate bonds to get corporate yields down so it didn't put a burden on corporations. Now, one of the largest bond holders of ETFs is the Federal Reserve. So we're seeing things change in that formation of capital. SWR: Going back to gold, it is often touted as a hedge against inflation. What's the situation with inflation in the United States currently and looking ahead? FH: If we look at what the inflationary number is today, and if we look at 10-year, 5-year and 2-year bonds, they all have negative real interest rates. That says that gold is a very attractive class. For me, gold stocks with rising dividends and free cash flow are even more attractive. I think that's one reason why Warren Buffett all of a sudden bought Barrick Gold Corp. (ABX:TSX; GOLD:NYSE). It has strong leadership. Newmont Corp. (NEM:NYSE) also looks attractive for many fundamental factors. Both have free cash flow. I think the free cash flow allows for rising dividends, so it's much higher than what you're going to earn with the negative real interest rates. I can't see interest rates rising dramatically. John Williams has a newsletter called Shadowstats. He looks at the old algorithms used to determine the Purchasing Power Index, Consumer Price Index, etc. And if you use his factors, inflation really is 8% today. So that says back up the truck and buy as many physical assets as you can. That's why real estate is up 10% in this bearish crisis. It's amazing. SWR: One thing that's happened this year is that investors have flocked to physical gold ETFs. Is this a good way to invest in gold bullion? FH: I've always advocated having a 10% weighting in gold—5% in either the SPDR Gold Shares ETF (GLD:NYSE) or 24-karat gold jewelry and another 5% in quality gold stocks. In particular, I've always loved the royalty companies. I think there's a big push for GLD because if you look at data for the past 20 years, bullion has outperformed the S&P 500 by almost 3:1. Bullion has been up 80% of the time. The largest hedge fund in the world, Ray Dalio's Bridgewater Associates, has always had exposure to gold, from 7–15%. I think this has led to other institutions looking at gold as an asset class. But I think the real charm here is because great investors like Warren Buffett all of a sudden buying a gold stock is going to change the paradigm during this quarter. Our data suggest that when we look back on the past 20 years at pre-cash flow yields, and we track 88 global gold producers and 200 explorers, under those 88 global producers—I'm talking about ones with market caps more than $50 million ($50M)—what I find interesting is that this will be the third quarter in over 15 years that they have a free cash flow yield. Even a year ago, they did not have an overall average free cash flow yield, and the S&P 500 had a free cash flow yield of 2.5%. In March, because of the crisis, the S&P 500 went negative on free cash flow yield as a whole, but gold just exploded. I think we're going to see record free cash flow yields from North American gold producers, and that will be a pivot point for many institutions to start buying gold as an asset class. This summer, in Investors Business Daily's Top 50 stocks to buy, all of a sudden, like back in 2005, gold producers were added to this list of growth stocks. We're now seeing Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) on there, we're seeing Kirkland Lake Gold Inc. (KL:TSX; KL:NYSE) on there. So I think gold will slowly climb. It's been in a bull cycle since January 2019 when the 50-day moving average went above the 200-day moving average. It has accelerated this summer and then corrected perfectly. In the next big wave, I think we're going to see gold stocks really outperform. SWR: U.S. Global Funds manages a number of mining funds. Could you talk a little about what you look for in a company when making the decision to invest? Is there any one type of company investors should focus on right now for the greatest upside potential—senior, midtier, junior, royalty companies? FH: We look at what is called "The Five Ms of Mining"—mine lifecycle, market cap, management, money and minerals. Basically when we go down the food chain, for explorers, management is key, as is where they are in the lifecycle of a mine. The early explorers can give you tenbaggers, twentybaggers—20 times your money—but, in time, they can fizzle out early and quickly, so you can lose your money. In that lifecycle, you want to have proven management track records in a well-known area and companies that are well funded and have good daily trading liquidity. When we go up the food chain, we want to look at the producers that have expanding production or have a free cash flow yield, which means with rising gold they're going to be able to pay higher dividends. We think that those stocks outperform. The most superior model is the royalty companies. They're like a technology stock, a software-as-a-service (SaaS) stock. They have recurring revenue and cash flow every month. They have high gross margins. If you look at financial accounting from streaming, etc., royalty companies push 45% gross margins, where the average gold mining company is at 15%. Royalty companies are in a very advantageous position, and we're seeing more new junior royalty companies trying to capitalize on that model. In fact, we're going to be doing a broadcast program with Streetwise on Thursday, November 12, at 1pm EST on 10 junior stocks that we like and we've invested in. You can register here. These companies will be telling their story "PechaKucha" style, which is 20 slides, at 20 seconds per slide, comprehensive but concise, in 6.4 minutes total. The presenting companies are Magna Gold Corp. (MGR:TSX.V; MGLQF:OTCQB), TriStar Gold Inc. (TSG:TSX.V), Barksdale Resources Corp. (BRO:TSX.V; BRKCF:OTCQB), Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX), Revival Gold Inc. (RVG:TSX.V; RVLGF:OTCQB), Silver Viper Minerals Corp. (VIPR:TSX.V; VIPRF:OTCQB), Orex Minerals Inc. (REX:TSX.V), Barsele Minerals Corp. (BME:TSX.V), Brixton Metals Corp. (BBB:TSX.V) and Gran Colombia Gold Corp. (GCM:TSX). For producers, Gran Colombia Gold Corp. is the least expensive of the whole universe of gold producers we follow. It also has an interesting gold note, which we own. Caldas Gold Corp. (CGC:TSX.V; ALLXF:OTCQX) is a spinout, which has been funded by Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) and the capital markets. But it will go from producing 24,000 ounces a year to 180,000 over the next three years, so I think it has probably the biggest ramp-up of a higher grade deposit that we see. There are very few gold mining companies that can increase their production sixfold over the next three years. They are the companies that we like, and we remain bullish in this sector. Now, I think what everyone wants to hear about is a takeover. With Ivanhoe Mines Ltd. (IVN:TSX; IVPAF:OTCQX), its richest deposit is copper, and it is funded by the Chinese. I think you're slowly going to see a change in management where the Chinese have more control. They own a big part of the deposit. I think they take this company out, and probably at double the price of what it is now. It's interesting to watch how this is going to unfold, but the deposit is coming into production earlier than expected. So those type of catalysts and interesting stories are what we find investors like to hear about, and we own that. SWR: Are there other companies that you want to talk about that you think offer investors good upside potential? FH: I'm very biased when it comes to our U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) trading on the New York Stock Exchange. GOAU is 30% royalty companies, 70% gold producers. It's a quant approach to picking gold stocks, from big cap down to small cap. Once they do anything to destroy their revenue per share growth, their cash flow per share growth or their reserves per share, with a merger or a silly financing, etc., they get kicked out of the model. Each quarter we recalibrate that and only look for the superstar companies that offer the biggest bang for the buck on those metrics. In that universe, the royalty companies are Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX), Wheaton Precious and Franco-Nevada Corp. (FNV:TSX; FNV:NYSE). After that, it's other very attractive gold stocks. SWR: Do you have explorers in the ETF too, or is it only producers? FH: No, only producers, and they have to have a $200 million market cap for liquidity. When you rebalance something and you have to move around $2 million at a minimum, you can have a big impact on the stock price up or down, so we want to have at least a $200 million market cap. SWR: Is there anything else you'd like our readers to know? FH: Yes. Go to USFunds.com, and you can learn more about the ETFs and our research. We publish a lot. We're on YouTube as well, with many educational videos. We, also, every Friday write the Investor Alert, which goes out to 60,000 people in 180 countries. We really try to help people be educated on various sectors of the market in this publication. We have won 90 awards now for educational information in the investment management world. SWR: Thanks, Frank, for your insights. Frank Holmes is CEO and chief investment officer at U.S. Global Investors, which manages a diversified family of funds specializing in natural resources, emerging markets and gold and precious metals. In 2016, Holmes and portfolio manager Ralph Aldis received the award for Best Americas Based Fund Manager from the Mining Journal. In 2011 Holmes was named a U.S. Metals and Mining "TopGun" by Brendan Wood International, and in 2006, he was selected mining fund manager of the year by the Mining Journal. He is also the co-author of The Goldwatcher: Demystifying Gold Investing. More than 30,000 subscribers follow his weekly commentary in the award-winning Investor Alert newsletter, which is read in over 180 countries. Holmes is a much sought-after keynote speaker at national and international investment conferences. He is also a regular commentator on the financial television networks CNBC, Bloomberg, BNN and Fox Business, and has been profiled by Fortune, Barron's, The Financial Times and other publications. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: ( Companies Mentioned: ABX:TSX; GOLD:NYSE, GCM:TSX, IVN:TSX; IVPAF:OTCQX, NEM:NYSE, ) from https://www.streetwisereports.com/article/2020/10/27/frank-holmes-gold-is-the-winner-of-the-u-s-presidential-election.html Avrupa Minerals Preparing to Drill Soon at Flagship Alvalade Copper-Zinc Project Closes Financing10/27/2020 Source: The Critical Investor for Streetwise Reports 10/26/2020 The Critical Investor profiles Avrupa Minerals at a time when the company is preparing to drill at its flagship Alvalade copper-zinc deposit, has closed financing and has completed a 4:1 consolidation.As 2020 keeps unfolding as one of the most remarkable years of the last decade with COVID-19 disrupting almost everything, resulting in unprecedented drops in economic activity and considerable volatility in the markets, and a second wave of the pandemic seems to be around the corner, the mining industry seems to be looking forward, on the back of a recovering economy, especially China returning back close to normal during the summer. A tiny company that is completely under the radar of many investors, but is also looking to get back into action, is Avrupa Minerals Ltd. (AVU:TSX.V; AVPMF:OTC; 8AM:FSE) with its flagship copper-zinc Alvalade project in Portugal, JV'd with MATSA (joined company of Trafigura and Mubadala, 2 commodity giants). Very recently the company announced a drill program for Alvalade, a 4:1 rollback and closed a small C$500k raise to pay G& and other ongoing costs, after receiving the all-important experimental exploitation license back in June of this year. The 4:1 roll-back will take place after shareholder approval is obtained at the AGM on December 14, 2020. The raise comprised 16.88 million units, consisting of a share and a full warrant, the share being priced at C$0.03 (pre-consolidated) and the warrant at C$0.05 (pre-consolidated) for a period of 36 months. The proceeds from the issuance of the units will be used to provide working capital for exploration programs in Portugal, Kosovo, potential new acquisitions, and for general corporate purposes. I don't usually regard a rollback without a complete overhaul of the company a welcome development as it dilutes existing shareholders, but in this case I view the Alvalade JV as such a robust and high quality JV that the company shouldn't have to toil around with share prices of sub 5c when doing the rounds during financings. Furthermore, the roll-back isn't that excessive, and this company doesn't have to do large raises for a while, as MATSA is doing the heavy lifting of exploration funding. After this quick catch-up regarding the company, it might be interesting to get something of a big picture update first, before Avrupa is discussed in further detail. COVID-19 has hampered Avrupa for the most part of this year, and is returning to the spotlights with a second wave now. Even Trump ending up in a hospital recently as a COVID-19 patient didn't hurt market sentiments, although no one really knows what exactly went on, how sick he was, and for how long. It even seems nowadays that his physicians seem to have invented an effective method to cure from virus, as a cocktail of synthetic antibodies and an anti-Ebola medicine got Trump back on his feet and working miraculously fast. In Europe where I live, people who suffered and recovered from the virus at a much younger age than Trump remain in a so-so condition for weeks or even months, although healthcare isn't really inferior, to say the least. As the markets, and to a lesser extent the real economy, were saved/backstopped by a massive US$2 trillion stimulus package, expectations are that this will happen again if the second wave starts to create lockdowns, etc., for the second time around. Trump and Treasury Secretary Steven Mnuchin are hesitant so far, but since a bill can be signed in 37 days if needed, I assume they are waiting until actual lockdowns are announced and eventual effects on the markets become more visible. I do expect the markets to react less violently compared to March, as they didn't know what to expect from government stimulus back then, and they do now. Stimulus isn't only confined to Trump politics, as Joe Biden is a big supporter of stimulus programs, as well, when looking at his election program, so Republican or Democratic, the markets will see stimulus if needed, and not left to crash into depression. On the back of a real economy that is recovering from the first wave, mining and metal prices are doing well, and especially copper, which is the most important metal for Avrupa's flagship project, is doing very well since the March outbreak as can be seen in this chart by Macrotrends: Copper prices are even closing in on 5-year highs set in 2017, but could be in for a small correction due to the upcoming second wave and potentially a chaotic presidential election. For next year a considerable deficit is forecast, so if the economy recovers further, I see copper prices going past US$3.25/lb levels. I do believe that, if a vaccine is developed successfully, economy and markets are eager to leave the current situation behind them, and a second stimulus package can help bridge the period between now and the moment the vaccine can be applied successfully at a large scale. This will take some time, as several programs by Big Pharma are paused or reconfigured as tests yield several undesired side effects in some cases. Considering the amount of research dedicated to this task worldwide, I hope and assume there will be a solution somewhere in the second half of 2021. COVID-19 aside, I'm always checking the second most important metal for Avrupa as well, which is zinc. Zinc prices saw more of a breather compared to copper in the last month or so, but is overall certainly enjoying a strong and robust recovery comparable to copper, since an estimated 25% of world production came to a halt in March 2020 due to the pandemic, as can be seen here in this chart of Kitco: As can be seen above, the zinc price is actually only just hovering along a long term US$1/lb average, so if a real economic recovery takes place, despite a bottleneck in zinc smelter capacity, we could see zinc prices go above US$1.20/lb levels again next year. An interesting detail around doing zinc due diligence was the ongoing discrepancy between a formerly assumed fundamental for the zinc price, LME inventory levels, and the actual zinc price:
A rising zinc price only corresponded with lower inventory levels until June 2018, after this it all didn't make any sense anymore. Something much more specific to the zinc market, spot zinc treatment charges (TCs) going down (there is no zinc offered to smelters so no supply) are usually a front runner to the zinc prices, as can be seen here in this old chart coming out of a January 2017 zinc report by RBC:
It wasn't easy to find a more updated chart regarding TC pricing, but one of the results was a Reuters chart from last year, showing high realized contract treatment charges as increased mine supply is creating the aforementioned bottleneck with smelter capacity: COVID-19 caused many temporary mine closures with major producers like China, Mexico and Peru, so TCs came down as expected, and can be witnessed in this more recent chart by Wood Mackenzie, taken from a Trevali Mining presentation: I am actually surprised to see the benchmark (= contract) TCs remain at US$300/ton during the COVID-19 crisis, as supply dropped off by about a quarter, and has seen spot TCs coming down a lot since the outbreak as well. The zinc price responded in reverse lockstep with the falling spot TCs as usual, but the gradual recovery in restarting mine production has seen spot TCs rising again and the zinc price correcting. What to expect next? Interesting to see is supply ramping up production to return to pre-pandemic levels on the back of recovering demand and also weather the high contract TCs, but on the other side there has been a lack of investments in smelter capacity the last few years, creating the ongoing bottleneck, and in the end creating zinc ingot shortages, which in the end could result in higher zinc prices when the economy fully recovers. As there is oversupply going on from mine production, I don't see a sharp spike in zinc prices coming anytime soon, usually created from a significant production supply/manufacturing demand deficit. According to an October 21 news release by the International Lead and Zinc Study Group (ILZSG), a platform formed by the United Nations, consisting of all major producing countries and industry players in the lead and zinc sector, several mines could experience problems to nameplate capacity again, but global supply for refined zinc metal will exceed demand significantly in 2020 (620kt), and for 2021 this surplus is expected to be 463kt. Notwithstanding this, the somewhat artificial deficit created by smelters could provide the markets with a zinc price at or above US1.10-1.20/lb levels for quite some time. This is about it for copper and zinc, let's have a closer look to the company, as promised. After receiving the new Alvalade Experimental Exploitation License (EEL) from the Portuguese Mining Bureau on June 15, the MATSA JV could be finalized, and exploration programs and budgets finally planned. MATSA also acquired two greenfield exploration licenses close to Alvalade at the same time as the Alvalade license issuance. As a reminder, the EEL covers an area of approximately 115 square kilometers, is valid for up to five years, and includes the Sesmarias massive sulfide discovery, the nearby historical Lousal Mine, the Monte da Bela Vista stockwork zone, and a number of other already known massive sulfide targets noted on the map. Avrupa will operate the project through a joint technical committee with full funding by MATSA for up to three years, subject to project milestones. I talked to President and CEO Paul Kuhn about the status of the exploration program as laid out in the news release of October 5, and this is the updated information:
In a closing remark, Paul Kuhn stated the following: "Even with help from MATSA's team of geos, things are moving slower than anticipated. We are all learning a new geological data reporting system in order to coordinate with MATSA's mine team. This includes both partners of the JV entity, PorMining. Both teams are working together to learn the geology and the targeting characteristics. This has expanded work for all of us, but is giving us a lot of new opportunities. Drilling will start on the Alvalade Project as soon as we can complete this first stage of work and get a drill rig from Spain. "MATSA sent over an experienced logging geologist from the mine a couple of weeks ago, to help us all integrate into their system. We've made quite a bit of progress, but there is more to do, and we will request the return of the geo for next week, probably. The work that we are doing at Sesmarias is further updating the model of the deposit from the previous iterations and putting it into the MATSA database will help us immensely with a proper 3D targeting model for the Sesmarias-Lousal-Monte da Bela Vista district. This means many new drillable targets in the upcoming drilling program beyond Sesmarias." Unfortunately, this all means a delay for the commencement of drilling, and the earlier communicated timeframe of the 7,0008,000-meter program being October 2020 will be moved toward later into Q4, 2020, probably November as mentioned. It is anticipated that the second wave of COVID-19 won't have a further delaying impact, barring a complete lockdown as we have witnessed in March-April of this year. As a reminder, the Sesmarias discovery combined with the Lousal historical resources/workings is the obvious target for MATSA, as it generates a 4050Mt resource potential (Sesmarias 10 Lens is guesstimated by me to contain about 1920Mt, Lousal a potential 20-30Mt, both guesstimated at 1% Cu or better). Avrupa and MATSA are looking to see if Sesmarias, Lousal and also Monte Da Bela Vista, all several kilometers apart from each other, could form a district scale system. In my last article about Avrupa, I calculated JV project/NPV potential estimates for the company at many multiples of the current share price (C$0.035 now vs. C$0.290.45 at FS stage, unconsolidated). Even the rock bottom cash compensation for the Avrupa interest per the JV deal (C$10 million) is almost three-fold of the current market cap, and as this compensation has been negotiated with metal prices at significantly lower levels, I see potential to renegotiate terms if these prices remain at current levels or go even higher in the next few years. Conclusion Although it seems to take a little while longer, Avrupa as the operator has been planning its exploration program for Alvalade together with the technical people of MATSA, and it is anticipated that drilling could start in November. As this is a new phase for the company, management thought the timing was right for a 4:1 roll-back, as the share structure and especially the extremely low share price weren't doing justice to the quality of the Alvalade JV, and could hamper future financing rounds. After closing this one last small C$500k raise, Avrupa is no longer completely dependent on MATSA. Alvalade, being an intensively drilled and mined brownfield project in the past with 4050Mt copper/zinc potential, could easily be brought back to life. If there is one JV partner that can do this, it is MATSA, which is backed by two giants and has brought a comparable 40Mt project from development into production in just three years. So, of course, this will not happen overnight, but if the drill bit can start proving up the anticipated resource potential, MATSA is not going anywhere soon, and Avrupa will likely benefit from these developments. I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published. The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsCritical Investor Disclaimer: Streetwise Reports Disclosure: Charts and graphics provided by the author. ( Companies Mentioned: AVU:TSX.V; AVPMF:OTC; 8AM:FSE, ) from https://www.streetwisereports.com/article/2020/10/26/avrupa-minerals-4-1-consolidation-should-improve-attractiveness-to-investors.html Source: Peter Krauth for Streetwise Reports 10/26/2020 Peter Krauth compares silver and bitcoin and explains why he believes investors should own both.At the risk of offending bitcoin or silver investors, I think this is a question worth asking. I have been researching and following these assets for some time. In my view, it's not an either-or dilemma. You should simply own both. I believe silver and bitcoin remain massively undervalued, and that the market fundamentals of both these assets look extremely bullish. The point is, like bitcoin, silver goes through massive rallies. Participating in them can be very lucrative. So let's review the outlook for bitcoin, then draw the parallels to better understand what may lie in store for silver. The Case for Bitcoin Born from its modest 2009 origins in the wake of the 2008–2009 financial crisis, bitcoin has come a long way, rising dramatically in value from its early days. Today, its influence is not only undeniable, it's inevitable. Consider that U.S. Fed Chair Jerome Powell recently told an IMF-hosted digital payments panel that 80% of central banks globally are exploring the issuance of a central bank digital currency (CBDC). He also said, "We do think it's more important to get it right than to be first and getting it right means that we not only look at the potential benefits of a CBDC, but also the potential risks, and also recognize the important trade-offs that have to be thought through carefully." As for being first, Powell was likely responding to China's head start, where it is already testing in select cities, and plans to launch its own digital currency later this year. European Central Bank president Christine Lagarde also said the ECB is very seriously reviewing the creation of a digital euro. Digital versions of traditional currencies not only mean it will be easier to create more, but also to control them more. It inevitably lends further credibility to bitcoin. As investors come to realize it can't be inflated or controlled, and has a finite total number of units (21 million) to be mined, they will gravitate toward the highly superior alternative. That's why bitcoin is increasingly seen as a safe haven. It has become more accessible through a growing number of cryptocurrency exchanges, and it has gained distribution through payment processors like Square (which recently bought $50 million worth of Bitcoin) and Paypal. It's accepted by big name retailers Microsoft, Starbucks, and Whole Foods, while the list keeps growing. And bitcoin ownership is soaring. The number of bitcoin addresses with a balance of $1,000 or more has just hit a new all-time high. JPMorgan recently said it expects over time bitcoin will grow in popularity with millennials, and Kanye West just reiterated his support for alternative currencies like Bitcoin. Bitcoin-Silver Parallels Much of what's I've said about bitcoin is also true for silver. It's not easily produced, there's a limited supply, it's seen by many as money, and it's a safe haven. And it can't be inflated. Like bitcoin, silver also goes through huge rallies which can lead to huge payoffs for investors. But a couple of things are different between silver and bitcoin. For one, the "elites" don't pay much attention to silver. It's there, it's relatively cheap, and it's a small market. Also unlike bitcoin, the supply of silver is not finite. And as I've pointed out previously, just 28.7% of new silver supply comes from primary silver mines. 71% of newly mined silver is only produced as a by-product of other metals like gold, copper, lead and zinc. So a large portion of newly mined silver is not driven by its price. If silver prices rise dramatically, that doesn't imply more production. Here's perhaps one of the most interesting comparisons. According to Steve St. Angelo of the SRSrocco Report (at $1,300 gold and $20 silver), all the investment gold worldwide is worth $2.93 trillion, all mined bitcoin so far is worth $240 billion, and the total investment silver market is worth $52 billion. My main takeaway is obviously not to pit silver against bitcoin. Rather, it's to point out their similarities, and the opportunities they offer going forward. Investors should not look see these options as mutually exclusive. Instead, they should simply own silver and bitcoin. Yes, they are likely to be volatile. But they also both have wild secular bull markets ahead of them. And that's way more important than any differences. --Peter Krauth Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in energy, metals and mining stocks. He has been editor of a widely circulated resource newsletter, and contributed numerous articles to Kitco.com, BNN Bloomberg and the Financial Post. Krauth holds a Master of Business Administration from McGill University and is headquartered in resource-rich Canada. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: from https://www.streetwisereports.com/article/2020/10/26/is-silver-the-next-bitcoin.html Source: Peter Epstein for Streetwise Reports 10/26/2020 Peter Epstein of Epstein Research discusses the significance of the ground magnetics and soil geochemistry data the company recently released.FenixOro Gold Corp. (FENX:CSE; FDVXF:OTCQB) announced exciting findings on its final data set from its recent ground magnetics and soil geochemistry program. The work has generated another new target area at its Abriaqui project in Colombia. Abriaqui is directly on trend, about 15 km to the west, of Zijin Mining's 12M+ ounce, high-grade Buriticá mine. Abriaqui is in the Middle Cauca geologic trend, where since 2007 >90 million ounces of gold has been discovered in epic deposits like AngloGold's Nuevo Chaquiro and La Colosa, and Gran Colombia's Marmato and Zijin's Buriticá deposits. FenixOro's main vein systems and porphyry target are in the northwestern portion of Abriaqui. This newly defined target is in the southeastern part of the project. The soil anomaly, open to the south, consists of a 100 meter line of samples, all in excess of 0.4 g/t gold. Since July, numerous other gold-in-soils anomalies have been reported across the property, but those have been associated with known families of high-grade gold veins. Additional unexplained soil anomalies including several samples over 1 g/t gold, along with the new magnetics/soil gold anomaly, add to the extensive target list in the southeast block and help assure a continuous pipeline of fresh drill targets. The plan over coming months will consist of an expansion of the soil grid to the south/southeast and additional detailed surface mapping and sampling. Given the lack of any other explanation for the anomalies, a second porphyry gold target has been postulated for this new area. The new target, 1,200 meters from where drilling is currently underway extends known mineralization to 2.5 x 1.0 km. The new target is 500 meters above area being drilled, supporting the thesis that the mesothermal veins have >900-meter vertical continuity. This continuity (of significant Au grade-in-soils) suggests the potential for new discoveries is not limited to only existing visible vein structures. Further, a coincident magnetic high indicates potential for second porphyry target. While phase 1 drilling at Abriaqui remains focused in the northwestern block, the relatively underexplored southeastern block contains "a number of equally interesting targets." The southeastern area hosts >30 small past-producing mines developed on high-grade gold veins worked intermittently over 80 years by FenixOro's local partner, a legal small miner's cooperative. The ongoing drill program is testing for the first time, six or more families of stacked, high-grade vein systems. Each target is distinct, drilling is targeting showings at different depths, angles and orientations, across multiple types of mineralization. Importantly, last week's news effectively extends the pipeline of new drill targets well into next year. Readers may recall that the main target at Abriaqui is a series of >80 "Buritica style," high-grade gold vein families present in corridors up to 1,200 meters long by 400 meters wide. Over 20 vein samples assayed 20+ g/t gold (up to 146 g/t). Many new veins are expected to be identified. Management will soon gain valuable insights on grades, depths, continuity, vein spacing and widths. If enough higher-grade vein material exists, interspersed with wider zones of 2+ g/t material, there could be one or more compelling deposit(s). Buriticá is not just a blockbuster mine for Colombia or even for South America—it's one of the largest and highest grade mine start-ups in the world, forecast to have a lowest quintile cost profile, [estimated US$600/oz. AISC]. This is Colombia's first (but not last) large-scale, underground gold mine. I had been wondering if the planned start of the Buriticá mine would be delayed due to COVID-19, but late last week it opened, marked by a ceremony attended by Colombia's President. This has not been widely reported…. hopefully it will be good news for FenixOro, a true vote of confidence—ground-breaking in the midst of a global pandemic! Colombia is a hot gold mining jurisdiction these days. Late last month, Newmont Corp. announced the formation of an exploration JV with Agnico Eagle Mines. The JV will explore prospective gold targets of district-scale potential, with a focus in the Mid-Cauca belt. The initial project is 60 km south of Zijin's operations. Stu Moller, FenixOro's VP of Exploration, and a key player in the discovery and initial development of Buriticá, commented, "Zijin Mining broke ground on its Buriticá mine — and in a way it broke ground on the rest of the gold mining industry in Colombia — showcasing the geological potential of the Middle Cauca Trend and highlighting the economic impact of a giant, high-grade gold deposit. It helped focus and refine the permitting process, demonstrating that a large mine doesn't have to carry large environmental challenges. It showed that foreign companies are not in Colombia to take the gold and run, but are making long-term commitments to responsible mining, ethical treatment of employees / stakeholders, and regional development outside of immediate mining areas." Circling back to the ongoing 4,500-meter drill program in the northwestern portion of Abriaqui, nine road-accessible drill holes are underway (currently on hole #3). Each inclined hole is targeting multiple steeply dipping (near-vertical) veins and lower grade interstitial stock-work type mineralization. A tenth hole will test the porphyry to a depth of 300 meters. CONCLUSION I believe that FenixOro Gold Corp. (CSE: FENX) / (OTCQB: FDVXF) has the potential to experience a re-rating in valuation upon the release of assays, (if they're strong), expected to begin arriving in about a month. Good drill results would tie Abriaqui ever closer to Buriticá, a mine worth close to C$2.0 billion vs. the C$1.4 billion Zijin paid when the gold price was US$500/oz. lower. By comparison, FenixOro's market cap is ~C$36 million. Near-term drill results, multiple high-grade gold targets, a world-class (very nearby) analog mine, a top mining jurisdiction—US$1,900/oz gold—there are lots of reasons to want to dig deeper into this story ahead of drill results next month. Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University's Stern School of Business. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosures/disclaimers: At the time this article was posted, FENIXORO GOLD CORP. was an advertiser on [ER] & Peter Epstein owned shares in the Company. Readers understand & agree that they must conduct their own due diligence above & beyond reading this article. While the author believes he's diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic. Streetwise Reports Disclosure: ( Companies Mentioned: FENX:CSE, ) from https://www.streetwisereports.com/article/2020/10/26/fenixoro-gold-expands-mineralization-to-2-5-by-1-0-km-over-900m-vertical-extent.html Source: Maurice Jackson for Streetwise Reports 10/26/2020 Maurice Jackson of Proven and Probable speaks with Andy Schectman of Miles Franklin Precious Metals Investments about the new Bretton Woods movement and the possible transition to a digital currency.Maurice Jackson: Joining us for a conversation to discuss a new Bretton Woods movement, the United States transition into a digital currency, and the opportunity before us as precious metals investors is Andy Schectman, the president of Miles Franklin Precious Metals Investments. Thank you for taking time out of your busy schedule and coming on such short notice to address the significance of the proposed economic and monetary events that are taking shape right before our eyes. Before we delve further into today's discussion, Andy, would you please introduce the IMF and the BIS as they are germane for today's discussion? Andy Schectman: The Bank of International Settlements (BIS) is more or less the central bankers' central bank, and it's located in Basel, Switzerland, and it sets the rules, so to speak, to all of the major banks in the world, whereas the International Monetary Fund (IMF) is, I guess you could call it an international organization. And this is an organization that's located in Washington D.C. And last time I checked, there was somewhere I think north of 190 maybe almost 200 countries that comprise the International Monetary Fund and its mission statement talks about securing financial stability and facilitating international trade and what have you, the conspiratorialist will tell you they are interested in lending money to the world, and indebting everyone, the third world countries notwithstanding. And they are an organization that more or less finances the world in many respects, finances countries to facilitate trade. So two distinct organizations, one located in Switzerland, one located in the United States. The Bank of International Settlements is more along the lines of working with the banks. And the International Monetary Fund is a little bit more diverse, works with countries, and is more concerned with trade and the balance thereof. Maurice Jackson: Speaking of the BIS, it passed a significant milestone last year that is known as Basel III. Why is Basel III paramount for all precious metals investors to fully comprehend? Andy Schectman: I believe Basel III is the most important event of my 30-year career. If we go back to 1944, the end of World War II, the Bretton Woods agreement anointed the dollar as the world reserve currency, the petrodollar, and even backed it by gold at that point. And from that point forward until recently, the U.S. Treasury market was the only tier-one asset in the world. Now, you could argue that an escrow dollar account would also have been tier one. And it was as far as the central banks were concerned. In other words, if the Bank of England was trading with the Bank of Switzerland, it would not have been pounds or francs used as collateral. It would have either been United States Treasuries, the only tier one asset, or a fully escrowed and funded dollar account with dollar bills in it that also would have been considered tier one. The definition of tier one is riskless, meaning the central banks viewed for the last nearly 80 years, the U.S. Treasury market as riskless. And gold had always been a tier-three asset, which meant only 50% of the value was calculated on a balance sheet. And that in it of itself on top of the volatility in the gold market, the fact that it cost money to store and the fact that it paid no interest were reason enough for people or central banks rather than to not accumulate gold. It incentivized the central banks to send all of their gold to New York City, to Fort Knox or to New York City, the Federal Reserve, where we would keep it for them on the account and pay them money for it. Of course, the dollar bills that they would take back at that time were fully backed by gold. So, it was a good deal for them because they could take those dollar bills, and then they could buy treasuries with it. And the treasuries would pay interest, which was a tier-one asset, and all of it could be redeemed for gold at any point. So, the central banks of the world gave us their gold and we held it until of course 1971, one when Nixon closed the gold window. But I digress. The bottom line is simply this: Since 1944, Maurice, there's only been one tier-one asset, U.S. Treasuries. In 2017, at the end of it, if we would have looked at a recap of that year, we would have said that central banks were net sellers of gold and had been up to 2017 if I were going to generalize. In 2018, nothing had been announced yet. And the central banks as a group bought more gold together than they did in the 60 years combined previously. In 2019, that trend was up over 90% and continues today in 2020. In April of 2019, the BIS had the Basel III decision to reclassify gold as the world's only other tier-one asset. Now, the central banks were voraciously accumulating it, as I mentioned, almost a year and a half before this decision. They were front running it. And they continue to do so today. And again, if you look at what the definition is of a tier-one asset, it's riskless. So, you have the most influential traders on the globe telling you that gold is a riskless asset, and they've been accumulating it for the last two years. To me, that is the most significant event of my career, because if you think about it, institutions like the BIS that have followed a set of guidelines for nearly 80 years do not make decisions like that in a vacuum. I think it tells us where the long game is or what the long game is for gold and how gold fits into the future monetary system. To me, it is without question, the most important decision in my 30-year career. Maurice Jackson: Basel III incentivizes the world central banks to procure gold. Now, let's bring the IMF into the discussion as it's proposing a new Bretton Woods movement. And you alluded to Bretton Woods. Let's just go back to 1944 and introduce us to the original Bretton Woods. And then let's segue that into the new Bretton Woods movement. Andy Schectman: The original Bretton Woods agreement was a meeting was among all the Allies involved in World War II. And they agreed to the dollar being the world reserve currency and the petrodollar and classified treasuries as the tier-one asset. And it was a good deal for the world. They would give us their gold and take our dollars and buy treasuries with it. They could then earn interest for their gold and the dollars that they would get back were redeemable for that gold at any time. It was a really good deal for the United States and the rest of the world, that financing of, if you will, of our treasury market helped us grow our country and our economy. And the rest of the world knew that the dollars that they had from us were as good as gold and redeemable in gold. And the fact that gold paid no interest and cost money to store alleviated two of the biggest problems they had with their gold. Now, they would earn interest for it and have it stored for them courtesy of the U.S. government. Of course, all of that changed in 1971, but in essence, Bretton Woods laid the foundation for the United States to live well above its means for the last 75 years as the world reserve currency and the petrodollar. Maurice Jackson: What is the IMF referring to when it announced a new Bretton Woods movement? Andy Schectman: Well, they were somewhat cryptic about it. It was just announced. In watching the release, I watched it from the actual IMF release on its website, which it's front and center. I guess what I look at is all the pieces of the puzzle that fit into place. You have the reclassification of gold as the only other tier-one asset. You have the banks voraciously accumulating the gold and de-dollarizing. You have the governments around the world's reaction to COVID that has more or less blown up Keynesian experiments, and currencies are being devalued. These currencies are being devalued so aggressively right now that I think it's time for a new system is more or less what they're saying. They're saying it's time for a new system of world reserve. Now, they weren't specific, but each little piece that we keep seeing, like the talk of a digital currency, I think is indoctrinating us into a new reality. And that new reality is of a new monetary system that's common. And when you have the BIS, which is the central bankers' central bank, the most influential people in the world, and then a conglomerate of nearly 200 countries who have all used the U.S. dollar as the world reserve currency for the last 80 years now saying it's time for a new Bretton Woods agreement. They weren't definitive, but I think we can all agree that change is coming. And I think that's really what 2020 has been for so many of us, learning to adapt to a tremendous amount of change. And I think the world's monetary system won't be immune from that change. I think it's coming. And that's really what they're saying. They're telling us that a new system is on the horizon. Maurice Jackson: It's interesting. I'm going to digress here, speak on the politics regarding this. As I'm watching the presidential debates, I'm just shaking my head as the moderators are not asking any questions regarding this subject matter. And it involves every single living person, not just the United States, and it's a conversation, let alone, you don't hear any reference to the Constitution made either, but this is not being discussed on the world's biggest platform. And I'm just shaking my head here. I can't fathom how this is not being discussed. Now, we're talking about the monetary system and currency. You referenced it. Let's now switch to the Federal Reserve. It is proposing a new digital currency. Andy Schectman: One of the things that people in this industry like to talk about is the inflationary effects of what the Federal Reserve is doing. And on one hand, I understand where that comes from. The Fed has created, I don't know, $9 trillion worth of wealth in the last year, starting with the repo market crisis of last September. It took this country 300 years to create $800 billion. And the Federal Reserve has created $9 trillion in a year. The Federal Reserve, when they buy bonds, they call it quantitative easing, many people believe that that is hyperinflationary. When in reality, it's deflationary. I'll try to be as brief and succinct as I can on a complicated issue. The Federal Reserve have two ways of making policy. One is that they can buy assets. That's why you're seeing many people believe through unison with BlackRock and the treasury, they're buying up assets. And those assets go on the balance sheet. They can buy assets on their balance sheet, and they can also deal with the federal funds rate, they can lower interest rates. And so what they can't do is create inflation. When the central bank buys bonds from the commercial banks, the treasury bonds, the money that is paid for those bonds does not go to the commercial bank's balance sheet. It goes to a reserve account at a member federal reserve bank in that bank's name, the only way the bank can access that money is through lending. So now, the banks have all of this money on reserve that can only be and utilized for lending. Money creation centers around lending and borrowing and spending, of course, but if no one is borrowing and no one is lending, the velocity grinds to a halt. Now, you go back to September and you see the commercial banks were all reeling from the repo market crisis. And you look at what's happened since you have an economy that's been decimated by COVID. And many businesses that are hanging on by a thread will be gone by year's end. So you have banks that have lent money to so many of these companies and corporations that are now dead, dying, or almost gone, which is making a tenuous balance sheet even worse, a fragile balance sheet even worse. So the banks are not lending. And when the Federal Reserve buys the bonds out of the system, it contracts. It's pulling liquidity out of the system. Under normal times, in normal times, the banks would be lending. People would be buying. If you look at the velocity of money, it's the lowest it's been, maybe ever, in a very, very, very long time. Lots of people trying to take out refinance, mortgages, or loans or or buy homes with a mortgage. A lot of these applications are being turned down, and most of them. The banks have no interest in expanding their balance sheet. So what that means to you and me is that we're not witnessing inflation yet. The only people that are taking these loans are the hedge funds let's say who has a beautiful balance sheet that can borrow the money at next to nothing and then put it into the stock market along with the Fed buying inflated assets that will continue to go higher because that is what one of the barometers of the health of the country as measured in asset prices, people feel rich. The Fed certainly does not want to let the asset prices tank. That is one of their primary objectives is to keep asset prices up high, make people feel rich, but it's a problem if the banks aren't lending. And so what you have is the rich getting richer and the poor getting poor. It's a K-shaped recovery you'll hear very often where the upper 45% or 50% are going up and getting wealthier and the bottom 50 or 55% are getting crushed. And that's exactly what has happened. So, the Federal Reserve is trying to make a workaround. Remember, they can buy the bonds, pay for it in money, held in a reserve account in the bank's name, the other banks that are selling the bonds to the Fed. Those banks need to lend money into existence. If the banks aren't cooperating and refuse to lend, no inflation. That's where the Fed comes in and says, "Ha, how about we give everyone a Fed wallet and we do a workaround, a flow-through, a pass-through? Go right around the commercial banks that aren't cooperating with our lending programs and we will deposit money right up to modern monetary theory, right into everyone's account. Even if they're not working, we'll give them money right into their Fed wallet." Now, if the Fed wanted to create inflation, they would put a period on that money. They could say, "We're going to give everyone $5,000 of new digital Fed coin, but you have to spend it within 60 days or it disappears." And now everyone would run out and spend it. The bottom line is simply this. If the Fed creates a Fed wallet like this for every man, woman, and child in this country, they now can create massive inflation with a click of a mouse, because they're usurping the lending process, they're usurping the banks who are refusing to lend and give money directly ala modern monetary theory, right to the public. And what that would do is ignite, many people believe, the fuse of hyperinflation, because what we're facing right now is hyperdeflation. Assets are deflating and assets are defaulting and businesses are going under, and people are saving instead of spending. No one is going out and spending frivolously any longer. They are battening down the hatches and paying off debt. And that is exactly contrary to the playbook that the Fed wants. So, they talk about a wallet that will enable them to go right to the public, which could very well quickly ignite massive inflation. Maurice Jackson: When one looks at the pernicious acts of the Federal Reserve, you would think they'd want the best for our nation, but they are causing devastation. It's going to cause so much turmoil for families. And the Fed will never take the blame. There's always a scapegoat, such as the speculators, the precious metals investors, but in reality, we're making the prudent moves and decisions that anyone should make. You should save a portion of what you make, and the Fed doesn't want that. You're exactly correct. They want you to spend, and they don't like our actions. So, let's recap here. We have Basel III, a new Bretton Woods movement and a new digital currency being proposed. What does that suggest to precious metals investors? Andy Schectman: Well, I think that if you put it all together, you have a digital currency backed by gold, because who the heck would drink the Kool-Aid ever again when you see that governments since the beginning of time, destroy currencies? Dr. Franz Pick once said all paper currencies inherently are meant to die. They all go to zero. They all go worthless because the governments that control them destroy them. And if you do not have a peg, a tether to some form of a governor if you will as to how much spending and money creation is created, then the currencies will always die and no one would ever drink that ever again. So, I think if I had to guess, if I were put on the spot, I would say this, that they will back a new currency. And I think this is going to come first, if not first, very close, I think you'll see this coming out of China, by the way. I think the Brazil, Russia, India, China, and South Africa (BRICS) nations are going to be a step ahead of us. And they're going to try to do the same thing. I believe China just launched its first digital currency last week. I think it's the opening shot across the bow. And when these countries peg it to gold, whichever one does it first, it'll be the beginning of the end of the United States dollar as we know it. And I think that what they will do is it will not be convertible, meaning you can't go into the bank and trade a dollar for a piece of gold. But what you will see, if I had to guess, would be maybe a 10% backing. So every new Fed coin is backed, 10% of it is backed, maybe 15% backed by gold. And the gold will be immutably guaranteed on a distributed ledger. Now, who going to house it and who's going to audit it, that's another question altogether. But if I had to guess, that's exactly what they will do. They will issue a gold-backed digital currency with custody of that gold denoted on a distributed ledger. And it will be a digital currency where they will be able to track everything that you do, everything and anything. We'll probably have six months to turn in all our currency because COVID can live on the paper currency they tell us. So, everyone will be forced to turn in their currency. Most people will comply happily to help eradicate COVID of course, and you will have a cashless society with a new currency backed by gold. And I think you'll see something almost identical or very similar coming out of the BRICS nations and China. And I think this is almost here. I think it's coming. It's coming quicker than people think. I started talking about this in March when right after all hell broke loose in this country. Nancy Pelosi came out with her House subcommittee finance bill and called for a digital currency because COVID could live on supposedly on paper currency. She called for it. Now, it was voted down. But the minute I saw that knowing what I already knew about the reclassification of gold, it just a light went off. Since I started in this industry in 1990, everyone would always talk about a cashless society. I could never see how they would do it, ever. Well, they figured out a way to do it. I'm not saying that COVID was man-made and this was done to reset the system, but I'll tell you one thing, you take a step back and look at this and put your conspiratorial eyeglasses on. And it's pretty hard to not at least have it flit through your mind because what this has done is blown up all of the Western economies at the same time with no scapegoat. Well, China, I guess you could blame, but you have a situation where now countries will be willing to start over because their economies blew up, the debt is not serviceable and it wasn't anybody's fault. So, let's start over. And I think that's what you're going to see. And I think it will be a digital currency. I think it'll be tied to gold some way. And I think the dollar bills in our wallet will be hanging from a frame in the Smithsonian before too long. I do believe that. Maurice Jackson: I don't even think we even have to introduce the word conspiracy here. You've laid out the economic generals. They have laid out for us the strategic moves they're going to be making. Basel III was the first move. And so it makes sense for China to continue to add to its position to gold, then it should be the first one probably to make the move towards a digital currency backed by gold. And now we're reverting to history. You have the new Bretton Woods movement, and it almost sounds like a quasi-gold exchange standard if you have a 15% backing because it was before it was 40% backing. Andy Schectman: Yes, that's exactly right. I think that's exactly what will happen. And I think that's exactly what they'll do. And at 40% doesn't give them enough latitude, but I think that 15% would. You have to be able to create money and be able to still have aspirations of a world reserve currency status. And if you're tied too closely to gold, either that or you have to raise gold to a much higher price will never come back down because it will be pegged to a new world reserve currency. Those numbers become realistic when you look at it that way. Quite frankly, I've never been a proponent of picking numbers out of the air, but I think it's coming. I think it is very, very soon and it is coming. And I think we all need to prepare. Maurice Jackson: We often discuss the ratios as a proven strategy for building wealth. Andy, can you explain the strategy, and what do the numbers suggest to purchase right now? Andy Schectman: I think silver and platinum are still very undervalued. Ridiculously so, but I think there will come a time when we move to gold. Not yet. I mean, I'm still a big advocate of gold, and I don't think that it is wise to bet against gold right now. When you have the most influential traders in the world telling you it is part of a next system, I would be accumulating it, but it does not have anywhere near the same level of value that silver and platinum markets do. I think the silver and platinum markets are unusually cheap and offer values that you could argue are once in a generation opportunity. Maurice Jackson: What is Andy Schectman buying right now? Andy Schectman: I am buying silver almost exclusively, have been for the last year. I typically buy on a scale of 1 to 10, I'd put about 80% of my money into silver and 20% into gold. I have plenty of platinum, I've been buying it the whole way up over the last several years. I think people should own platinum. I don't mean to ignore that question, but to me, platinum is a tertiary investment. It does not have the monetary history that gold and silver do. Now, some people will say it was used in Russia a few hundred years ago as monetary this and that. It does not have the same monetary history as gold and silver. I think that gold and silver are where we want to be for now. Platinum is a good value, but I think when the world gets frightened, they run to gold and silver. Silver to me is the best choice because not only does it have a huge industrial aspect component, but it also is the only item that has a monetary history too. You look at a metal like copper that is all industrial and a metal like gold that is almost all investment. Silver is the best of both worlds, industrial and monetary. And I think people will realize that and they will start running in that direction. I do believe that's coming. Maurice Jackson: And just for the record, because I know I get this asked as well. So, let's address it now. I'm a very big buyer of platinum and recently I've added a little bit of semi-numismatic gold to my portfolio. And before we close, sir, what keeps you up at night that we don't know about? Andy Schectman: I think these are scary times, Maurice. And I think that we have to learn to adapt, to change. Things are going to change an awful lot. And I'm less concerned about what we're talking about financially. I have been buying gold every two weeks for 30 years and I've never missed it. And when I say gold, that means something gold, silver, platinum. I've never missed two weeks. To me, that is wealth. I'm less concerned about that and more concerned about the world my children are growing up in. More concerned about what comes next in this crazy world. And so to me, it's more about the social aspects than it is the economic aspects. I think we'll all be fine. Owning gold and silver will be a life raft, but the world that we live in right now is a shell of what it was just a few months ago. And I'm concerned, especially here in Minnesota, it's a snowstorm here in Minnesota, today, five inches of snow on the ground the earliest I can ever remember. Just icing on top of a 2020 cake. And when you talk about what that means to a place like Minnesota or any of the northern cities, it's devastation for any of the hospitality that's been hanging on by a thread. All the restaurants that have had outdoor seating, all of that stuff, it's over. And I'm very, very, very frightened for what the world looks like now, after the election, over the next several months, how does it play out? And I think that to me the finances should come in secondary to the greater picture, what we're seeing in the world. So, that's what keeps me up at night, what the world looks like that we find ourselves living in and what happens as time passes especially here in the winter. So, that's what keeps me up at night, It's just living in the epicenter of craziness here in Minnesota. And now that there's snow on the ground, the golf courses are closed. The restaurants that have been hanging on by a threat are going to close. The hotels are going to close. The Uber drivers are going to have no job. Go down the list and things that once made up the things that we find enjoyable about life are few and far between right now. That's what's keeping me up at night more than anything. Maurice Jackson: You said something so important there that I noticed, and you do all the time, is your concern of the social and human component at stake here. Not the financial component, is human because, in the end, we're all human beings, and life matters. And we care about you, the reader. We want you to prosper financially, but we want you to also be alive and healthy. That's more important than anything. Mr. Schectman, before we close, for someone listening and wants to contact you, please share the contact details. Andy Schectman: I can be reached at (800) 255-1129, my direct dial, or [email protected]. Maurice Jackson: Mr. Schectman, it's always a pleasure speaking with you. Wishing you the absolute best, sir. And as a reminder, I am licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum, palladium, and rhodium, to offshore depositories, and precious metals IRAs. Give me a call at 855.505.1900 or you may email: [email protected]. Finally, please subscribe to www.provenandprobable.com, where we provide Mining Insights and Bullion Sales, subscription is free. Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: Proven and Probable LLC receives financial compensation from its sponsors. The compensation is used is to fund both sponsor-specific activities and general report activities, website, and general and administrative costs. Sponsor-specific activities may include aggregating content and publishing that content on the Proven and Probable website, creating and maintaining company landing pages, interviewing key management, posting a banner/billboard, and/or issuing press releases. The fees also cover the costs for Proven and Probable to publish sector-specific information on our site, and also to create content by interviewing experts in the sector. Monthly sponsorship fees range from $1,000 to $4,000 per month. Proven and Probable LLC does accept stock for payment of sponsorship fees. Sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734. The Information presented in Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. You should not make any decision, financial, investments, trading or otherwise, based on any of the information presented on this forum without undertaking independent due diligence and consultation with a professional broker or competent financial advisor. You understand that you are using any and all Information available on or through this forum at your own risk. from https://www.streetwisereports.com/article/2020/10/26/is-a-gold-backed-fed-digital-coin-in-the-offing.html Source: Streetwise Reports 10/26/2020 HighGold Mining's recent drill results and current and next drill campaigns are reviewed in a Haywood report.In an Oct. 15 research note, Haywood analyst Kerry Smith reported that "resource expansion drilling at HighGold Mining Inc.'s (HIGH:TSX.V; HGGOF:OTCQX) main Johnson Tract deposit continues to deliver high-grade mineralization in stepout holes outside of the main resource area." Smith reviewed the latest drill results from JT, including those from four more stepout holes of 50 meters (50m) or less. The aim of this drilling was to expand the northeast side of the deposit. Hole JT-096 returned 11.5 grams per ton (11.5 g/t) gold, 4 g/t silver, 0.5% copper and 3.1% zinc over 20.1 meters. Hole JT-095 demonstrated 10.35 g/t gold, 4.9 g/t silver, 0.51% copper, 9% zinc and 0.01% lead over 4.2m. Other new results are from the copper discovery in the JT deposit's footwall. Highlights of those include 2.7% copper, 1% zinc and 34 g/t silver over 14.2m, in hole JT20-096, a 45m stepout. "This footwall zone adds potential for good byproduct credits," Smith noted. Assays are pending for 22 more holes drilled at the JT deposit and its footwall. A third set of assays comes from the first two of eight holes drilled at the Northeast Offset target, 500–800m to the northeast of the JT deposit. These "interesting" results, as Smith described, include 15.2% copper, 173 g/t silver and 0.8 g/t gold over 1.2m at 794m downhole, in hole JT20-094. Smith highlighted that HighGold's planned 2020 drill program at JT was for 15,000 meters, and to date it completed 14,000 meters. However, the company just expanded the campaign to 17,000 meters. It is still drilling now with three rigs and likely will keep drilling through the fall, weather permitting. HighGold also has been preparing for its 2021 campaign by working to develop additional targets at other prospective areas on the property, indicated Smith. Those efforts have included completing of 1,200 soil and silt samples, taking 600 rock samples and conducting a geophysical survey of the Difficult Creek and Kona Prospect areas. HighGold's stock is currently trading at about CA$2.15 per share. Haywood does not have a rating or target price on HighGold. Read what other experts are saying about: Disclosure: Disclosures from Haywood Securities, HighGold Mining Inc., October 15, 2020 Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations. Important Disclosures Research policy is available here. ( Companies Mentioned: HIGH:TSX.V; HGGOF:OTCQX, ) from https://www.streetwisereports.com/article/2020/10/26/drilling-continues-to-expand-mineralization-at-alaska-project.html Source: The Critical Investor for Streetwise Reports 10/22/2020 The Critical Investor, an avid and critical mining stock investor and newsletter writer from Europe, looks for high-quality companies, strong short-term catalysts and deep value. In this interview with Streetwise Reports, he takes a deep dive into the drivers behind gold's appreciation, discusses several criteria he uses to evaluate mining juniors and developers, and profiles, using his numbers-based approach, 13 junior mining companies, most of which are featured in his portfolio.Streetwise Reports: Gold and silver have been trading more or less sideways for the last month or so. What do you see ahead for the precious metals? The Critical Investor: The question is simple, but as precious metals and especially gold have no fundamentals but sentiment drivers, in my view, the answer isn't as simple and straightforward. First and foremost I am no gold bug, nor any metal bug for that matter. The two drivers I consider most important for gold are negative real interest rates (interest rates below inflation levels) and the U.S. dollar itself, besides the general fear trade that gold usually is. For the foreseeable future I see a very dovish Federal Reserve on interest rates, possibly with the intention to leave rates this low for at least one year and potentially more, as inflation is running below their target. It's uncertain if there will be another U.S. stimulus package before election day, but if there isn't, it is my feeling that the second COVID-19 wave might invoke one anyway. The first stimulus package, of unprecedented size, sent the dollar lower and gold higher, and this has reversed somewhat the last two months. Without another colossal stimulus package, the dollar is now considered by several experts as a potential safe haven against COVID and the elections, possibly keeping gold in the US$1850–1900/oz range, but as mentioned, I don't see this as a real possibility as Europe and other parts of the world are already facing the consequences of the second COVID wave and are acting upon it, whereas I see the U.S. as problematic in this regard, which will almost certainly trigger a new package. What will be the result of it? Usually there is a stronger first time effect on unprecedented events and measures, as people tend to get used to a new situation and are not as surprised in a good or bad way anymore when things happen for a second or third time. As the stock markets are already at or near all-time highs, with economic fundamentals lacking, meaning potential overvaluation, reinforced by, for example, share buybacks and the mutual funds of the Vanguards and Fidelities of this world, I don't see these same markets gain much more beyond their all-time highs based on stimulus packages. But what it could invoke is the U.S. dollar going lower, creating another opportunity for gold, after the second COVID outbreak, which could scare people out of anything from gold to stocks, to go even higher than the US$2068/oz record set in August, especially with a solid framework of ongoing negative real rates. As far as a second COVID correction goes, I do believe that at the time of the first outbreak everybody was panicking, with a vaccine nowhere in sight anytime soon, not knowing what to expect for support coming from the Fed and governments. We know now that these parties are very generous, work much more swiftly than during the 2008 financial crisis, and will do whatever it takes again. So my guess is that a second correction will by far not be as steep and deep as the first one; China manufacturing and consumption has recovered nicely, key indicators in this area keep coming in above expectations in the Western hemisphere, and as a vaccine seems near for Q1 2021, this could add confidence to the markets as well. SWR: Precious metals and base metals don't all move in lockstep with each other. What metals do you think will do better than others in the middle to longer term? TCI: As discussed in my last answer, based on a few assumptions on sentiment drivers, I see gold doing well, followed by silver, which has less appeal to investors and is much more volatile. As silver seems to be decoupled from gold the last few years, has much less intrinsic value and is often a by-product of other metals, and is also much less used as a storage of value but used more in industrial manufacturing, investors tend to speculate much more in gold and gold stocks. I don't have an opinion on platinum group metals (PGMs), by the way. I remember four years ago, PGM mines were closing, car catalytic converter demand was increasing, so it was a no brainer to invest in platinum and platinum stocks, only to see everything go down after a quick short rise, and trading sideways for years. Palladium did well on the other hand, as supply/demand fundamentals were far more positive than for platinum, although it is used in much smaller volumes for more or less the same purpose. I don't understand it, so I don't have an opinion on this. Base metals are also doing well these days, as China is recovering nicely from COVID, and production and consumption data are improving, and as a result imports of all sorts of base metals by China is increasing. Copper has made a remarkable recovery from its March lows of US$2.05/lb, hovering above US$3/lb now after a few volatile weeks. Also playing a part in this were supply issues in important copper producing jurisdictions like Chile and Peru, but as these are coming on-line again, the copper price sees some pressure lately. We were entering a deficit this summer, and it is expected by experts that this deficit will expand next year, so I expect the US$3/lb levels at least to hold if this comes true. Around US$3/lb, most copper projects are economic, this is an important base case threshold. More or less the same (China demand improving, Chile/Peru mines halting temporarily) goes for zinc, as both countries are important producers of this grey metal as well. However, the zinc market is a more complex one, as zinc smelters basically control prices, and are known to operate not very transparently, causing giants like BHP exiting the zinc market altogether. Zinc projects in general need a higher zinc price than the current US$1.05/lb, more like US$1.10–1.20/lb. Nickel has also seen a great recovery on improving China figures, but it is believed that its future is tied to the demand of electric vehicles (EV), and more specifically, its batteries. Because this is a market with lofty forecasts, but also heavily dependent on government subsidies and necessary technical progress, the timeline of supply/demand in nickel isn't clear for the moment. But as current production needs to be expanded meaningfully, and future new mines are far and few between, it is anticipated that somewhere in the future nickel prices should go up. At the current nickel price of US$6.65/lb, not a lot of projects are economic, if any; usually a nickel price of US$7.50–8/lb is needed. Something else is playing a role apparently in the EV universe, and this is Elon Musk of Tesla, calling for mining projects that will produce battery materials like lithium and nickel. According to a hilarious article in Mining.com, it seems he has no clue what he is talking about, but the effect is impressive nonetheless, sending most lithium and nickel stocks much higher. SWR: Do you see certain types of mining companies as better investments than others? For instance, seniors vs. juniors vs. mid-tiers? Explorers vs. developers vs. miners? TCI: This all depends on your risk profile, as any licensed portfolio manager can confirm to you. Personally I don't trade miners, as I see them simply as leverage on the gold price if well run with good assets in good jurisdictions. I like more autonomous growth/catalyst potential in my stocks, as you can find in explorers and developers. But again, the earlier stage the more risky. Most explorers tend to double or triple in a bull market just on the narrative before drilling, and more often than not the drill results disappoint and the stock loses 50% or more in a day. But if successful it could run up 2 or 3 times in a day as well, often directly after the open, so it is hard to get in then. I have seen my fair share of disappointing explorers, so I tend to be more careful now and predominantly play the narrative after getting in early. For every 3–4 losers you need a solid winner, so it is a difficult game if you elect to hold everything during first drill results. In my view, it is never a bad thing to invest in quality projects and management. On the other hand, these companies often see overvaluation as they attract a large following based on exactly those criteria. So it is key to get in early, accept a certain amount of early-stage risk and size position accordingly. Usually I focus on new companies with strong management and a project that already has a resource, or a historical resource, has a growth story and has no problem raising lots of cash. SWR: You have a background in construction/project management. How does that affect the way you look at mining companies? Do you feel that you offer a different perspective than other industry commentators? TCI: My background gives me a result driven, more analytical point of view as I am not only interested in narrative, management, jurisdiction and geology, as most commentators are, but also interested in hard facts and figures, and also focused on the future. Where could this resource or project go from here and why, without too much arm waving? I always like to compare a project with peer projects, model my own discounted cash flow analysis, see how it can develop regarding economics. But I also like to estimate resources based on drill results, which in my case without a geological background and geo software doesn't go beyond the back of an envelope, but I haven't been that far off in most instances, although there is a lot of luck involved, of course. SWR: What criteria do you count as important in evaluating an investment in a mining company? TCI: As I mentioned earlier, strong management with a history of success in juniors is important. But there can only be so many strong management teams with track records, so the opportunities in this regard are limited. Below them are the talented newcomers, but without much of a track record, so harder to detect. In that case, following the money is often quite useful. I found that talented newcomers have no problem raising cash and attracting well-known directors/advisors, so when I see a junior with a team unknown to me raising C$12–20 million out of nowhere, I'm surely interested to know more. I also have a network of people who know most in the industry, providing me with their opinions if asked. In some cases this also works for projects, as most interesting projects have seen earlier exploration. This is something an investor can ask the management of other companies that are working in the same area; often their geologists know many other projects. Beware of bias and pitching of their own project, but usually something useful comes out of it, which can be presented to management of the researched company itself. Geologically speaking, I would like to see as many available good drill results as possible, and before any recent drilling has been accomplished, a relatively high acquisition price of an exploration asset at least points towards an implied higher chance of success. An existing (historical) resource is a nice thing to have and something of a potential backstop to me, when all (sometimes "blue sky," "district scale") stepout exploration plans fail unfortunately. On the other hand, I have had some nasty "we have a great historical resource and all we have to do is just a bit of infill drilling to satisfy the regulators and get it to 43-101 compliant" experiences as well, so it is not that easy. Regarding an existing 43-101 compliant resource, I tend to estimate ASAP if it is or could become economic, by estimating assumptions based on comparable economic studies. If I have my doubts, I contact management with my findings and let them counter these if possible, until I'm satisfied. Other important subjects are jurisdictions, often further specified to the area the project is located, as, for example, a country can have completely different state/province mining regimes. Every country or jurisdiction has its own very specific fields of attention. For example in Nevada, generally considered as one of the best mining jurisdictions worldwide, the coveted water rights are something that can cause lots of trouble when not acquired and permitted well before construction. In Peru, mining companies have to deal with local populations and governments for permits, but often also with regions that are pro or against mining, so it is important to know beforehand which claims you are going to stake, and for that you have to know the area very well. Another issue with lots of countries is that you need a team on location that is assembled almost completely out of local people, in order to get things done. This involves a lot of training, local presence, support of local communities, etc. In general, basic things like share structure, debt, loans, roll backs in the past, name changes, management changes, management compensations, G&A, etc. all need to be checked in the news releases, financial statements and the MD&A documents on SEDAR. SWR: Would you like to discuss several companies that you think present investment opportunities? TCI: Sure, there are a number of companies I am following, being sponsored by and/or a shareholder of; each represent different opportunities on their own. I'll describe them in a nutshell in no particular order, so readers can decide where to go from there with due diligence: Queen's Road Capital Investment Ltd. (QRC:TSX.V) (market cap C$102M): This is an emerging financier in resources, led by Warren Gilman, a well-known large scale financier in the mining business. Plans to build a multibillion dollar market cap. Has billionaire friends backing him, raised about C$80 million with them in a heartbeat, is considering funds and banks now for additional cash. Planning to buy equity, with a focus on convertible debt securities, entering the mine financing hole left by big banks. First equity investments included NexGen Energy and IsoEnergy. Management and insiders hold 9%. KORE Mining Ltd. (KORE:TSX.V; KOREF:OTCQB ) (market cap C$134M): The company fully owns three gold projects, two of which are development stage heap leach projects in California, and both have a recent preliminary economic assessment (PEA). The Imperial project, close to the Mesquite Mine (owned by Equinox Gold) has a post-tax NPV5 of US$343 million and IRR of 44% at US$1450/oz Au, and needs capex of US$142 million. Long Valley has a post-tax NPV5 of US$263 million and IRR of 40% at US$1600/oz Au, with a capex of US$158 million. At a gold price of US$1900/oz, both NPV5s account for a combined US$1056 million value, compared to a market cap of C$$128 million. The CEO is Scott Trebilcock, a funny character and former chief development officer of Nevsun Resources, leading the acquisition of Reservoir Minerals, the defense against a hostile Lundin bid and the eventual buyout by Zijin Mining for C$1.9B in 2018. Eric Sprott holds 26%, management holds 38%. Adriatic Metals Plc (ADT:ASX; 3FN:FSE) (market cap A$409.64M): This company is developing one of the most impressive and profitable (polymetallic) projects worldwide, which is the fully owned Vares project in Bosnia-Herzegovina. The very recent Prefeasibility study delivered a strong post-tax NPV8 of US$1,040 million with a stunning IRR of 113% and a US$173 million capex, based on US$24/oz silver, US$1900/oz gold, US$1.14/lb zinc, US$2.95/lb copper and US$0.91/lb lead prices. Economics held up nicely compared to the scoping study results, with back of the envelope calculations using the considerably lower PM metal price assumptions from the scoping study the NPV and IRR would drop off only 10-15%. Capex appears to be a low number at first sight, but it is actually extremely high for a relatively small 800 tonnes per day operation. The reason for this can be found in the underground development costs that are included with capex, rendering sustaining capital extremely low as these costs usually are accounted for in this last category. Opex is also relatively high as four different concentrates have to be produced and transported to smelters. The company is busy permitting, which has gone a bit slow but steady so far. Sprott Global is a 5% shareholder, management holds 26.6%. Cartier Resources Inc. (ECR:TSX.V) (market cap C$51.5M): The 100%-owned flagship Chimo Mine gold project in Quebec has an Indicated and Inferred resource of 1.2Moz @4.2g/t gold, with mineralization starting at surface and open at depth. The company is drilling the project, and forecasts a 1.7Moz resource in Q4 2020. A lot is expected from Benoist, its more early stage, second most important exploration project, for which money has been raised in August, and a major drill program is planned at the moment. The company has C$13.8 million in cash. Management owns 3%. Treasury Metals Inc. (TML:TSX: TSRMF:OTCQB) (market cap C$146.6M): Treasury Metals acquired the Goldlund asset from First Mining this year for a lot of equity in return, located adjacent to its Goliath Gold project, in Ontario, giving it a 3Moz gold resource base with the potential to grow this much larger. Goliath already sports a 2017 PEA with a post-tax NPV5 of US$334 million and an IRR of 18%, based on a US$1250/oz gold price. My estimates on combined Goliath-Goldlund project economics generate a hypothetical post-tax NPV8 of US$609 million and IRR of 35.7% at US$1700/oz gold. A combined PEA and an individual Goliath PFS is expected in Q1 2021. The company raised C$11.5 million in July; management holds 3%. Sponsoring company. Cassiar Gold Corp. (GLDC:TSX.V; MARFD:OTCQB) (market cap C$24.9M): With the second iteration of Margaux Resources, which didn't find much success on early stage gold and zinc exploration projects, Steve Letwin, former longtime CEO of IAMGOLD, decided to buy the Cassiar project in BC, which sports a near surface, most likely very economic 1Moz @1.43g/t gold resource. According to technical advisor Doug Kirwin of Ivanhoe fame, the potential could be 3–5Moz. The company is raising C$6 million at the moment. Management, Board of Directors and advisors own 42.1%. AbraPlata Resource Corp. (ABRA.TSX.V) (market cap C$148.6M): Abraplata is an exploration company with projects in Chile and Argentina. Its 100%-owned flagship open pittable oxide Diablillos silver-gold project in the mining-friendly Salta province in Argentina has an indicated resource of 80.9Moz silver and 0.73Moz gold, or 1.7Moz AuEq @2.1g/t AuEq, which is a very high grade for an open pit project. As a result, the 2018 PEA has excellent numbers, with a post-tax NPV7.5 of US$212 million and IRR of 30.2%, already achieved at US$1300/oz gold and US$20/oz silver. At current metal prices, the NPV more than doubles. This is not all however, as the deposit is open at depth and along strike, and is believed to be part of a large system with a potential porphyry nearby, all of which is explored at the moment. An updated resource and PEA is expected in H1 2021. The company has C$25 million in cash in the treasury. Eric Sprott, Altius Minerals and SSR Mining own 37%, management and board own 3%. Fireweed Zinc Ltd. (FWZ:TSX.V) (market cap C$65.2M): Fully owns the 50Mt MacMillan Pass zinc project in the Yukon. The 2018 PEA has solid economics with a post-tax NPV8 of C$448 million, IRR of 24% and capex of C$404 million, at a zinc price of US$1.21/lb. Based on C$71 million government infrastructure funding that can be subtracted from capex, and a new discovery at the Boundary Zone (very impressive 100m @ 7.94% Zn intercept from surface), I expect economics to improve quite a bit as the resource likely will grow significantly and could easily double on Boundary alone, in my view, based on which the updated PEA will come out in 2022. It is a slow mover, but the resource has clear potential to be Tier I, and developing such a rare, large asset takes time. Management owns 12%. The following companies are more of a speculative nature, their projects being more early stage: Avrupa Minerals Ltd. (AVU:TSX.V; AVPMF:OTC; 8AM:FSE) (market cap C$3.3M): This is a nano cap prospect generator with its flagship copper/zinc project in Portugal. The company recently received its exploration permit, which in turn sealed the JV deal with MATSA, the mine construction and exploration vehicle of Trafigura and Mubadala, two commodity/investment giants. Drilling on the Alvalade project, which includes proving up lots of left behind resources from an old mine, is fully financed by MATSA and will start soon. A small raise (C$500k) is in the works, and a 4:1 roll-back is planned for December. Management owns or directly controls 16%. Sponsoring company. Golden Arrow Resources Corp. (GRG:TSX.V; GARWF:OTCQB; G6A:FSE) (market cap C$21.5M): This company had its arm twisted by SSR Mining, when it was forced to sell its 25% JV interest in the ramping up Puna operation at rock bottom silver prices in Q3, 2019. This disappointed many investors and rightly so, as the Chinchillas discovery didn't return anything for them in the end. I sincerely hope the company has learned its lessons when negotiating JVs in the future. For now, the company is backstopped by C$28 million in cash and SSR Mining shares which is more than the current market cap, and are drilling and preparing several prospective drill targets in Latin America. The company sure knows how to explore and has the cash to do extensive drill programs and studies, so with metal prices at current high levels any discovery will be a strong catalyst, in my view. Management owns 7%. Sponsoring company. Kenorland Minerals/Northway Resources (NTW.V, in the process of an RTO with Kenorland [private], raising up to C$12 million, estimated resulting market cap about C$47M; I'm looking to get in after it's listed): As a private company, Kenorland made an interesting gold discovery at its Quebec project, hitting 29m @8.47g/t gold from 72m depth. Zach Flood is CEO of both companies, an upcoming talent and a personal favorite of Rick Rule. As a consequence, Rule and Sprott have been supporting and investing in his companies whenever possible. Very impressive team of advisors with David Broughton and Peter Meredith, both from Ivanhoe fame. Management owns about 9%. Forum Energy Metals Corp. (FMC:TSX.V) (market cap C$16.5M): Forum is a prospect generator, which has JVs for its flagship Janice Lake copper project (with Rio Tinto, C$30M) and its Fir Island Uranium project (Orano, formerly AREVA, C$6M). Rio Tinto has set up an 80-person exploration camp this summer, and recently completed an IP survey, sampling and first rotary air blast drill program on Janice Lake, for which the results are awaited by the end of October. These results, if successful, will be used to design a diamond drill program for next year. Forum is also exploring the 100%-owned Love Lake Copper/Nickel/PGM project. All three projects will be diamond drilled next year if early stage exploration is successful. Management owns 9%. Riley Gold Corp. (RLYG:TSX.V) (market cap C$9.9M post closing): Riley Gold is an early stage exploration play with gold projects in Nevada, including one project where historical drilling returned numerous mineralized intercepts in the 1–2 g/t gold range, with highlights of 12m @ 2.54g/t from 59m including 10.7m @ 2.89g/t, 18.8m @ 1.25g/t from 80.8m, and 27.4m @ 0.72g/t from 233m. The company just closed an oversubscribed C$3M round at C$0.20 on October 16th. The share price increased to C$0.39, probably when word reached brokers they were doing a financing, so I am waiting until the dust settles here. The company is led by CEO Todd Hilditch, who is very familiar with gold exploration projects in Nevada, and Executive Chairman William Lamb, the former CEO of Lucara Diamonds, bringing it to a C$1 billion valuation at its peak. Another director, Stuart Smith, is former technical director strategy and new projects for Teck. The company appears to have become much more active since the beginning of October 2020. Management owned 30% before the financing, after the closing they still hold 18%. SWR: Any parting thoughts for our readers? TCI: These are extraordinary times for everybody, and represent challenges, threats and opportunities for everybody. As COVID-19 is staging a vicious comeback, and the U.S. is following Europe with a small delay, as I expect, that could result in very interesting presidential election circumstances with lockdowns, facial masks and special voting procedures having the potential to create unexpected outcomes. National debt is already at such lofty levels that raising interest rates to more normal levels (2-3%) has become almost impossible, and will probably guarantee low rates to be a reality for many years to come. As long as inflation remains higher than interest rates, this could create the ideal environment for things like gold and gold related investments. Things are chaotic nowadays with COVID-19, but when a vaccine is developed, which is anticipated in H1 2021, I see the real world economy gradually (or maybe even pretty quickly) returning to former activity levels. This in turn could fuel a real wave of enthusiasm on the markets, including the TSX and TSX.V, also lifting base metal sentiment and corresponding stocks. SWR: Thanks for your insights. With the pandemic, stimulus packages and the U.S. presidential election creating so much financial uncertainly, precious metals will be closely watched in the months ahead.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name. The Critical Investor hopes you will find this interview interesting and useful, and will have further interest in upcoming articles on mining. To never miss a thing, please subscribe to the free Critical Investor newsletter on the website a href="https://www.criticalinvestor.eu" target="_blank">www.criticalinvestor.eu, in order to get an email notice of new articles soon after they are published. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsCritical Investor Disclaimer: The author is not a registered investment advisor, and currently has a long position in all stocks mentioned, except Kenorland Minerals and Riley Gold. Treasury Metals, Golden Arrow Resources and Avrupa Minerals are sponsoring companies. All facts are to be checked by the reader. For more information go to the website of the companies and read company profiles and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions. Disclosure: Image provided by the author. All pictures are company material, unless stated otherwise. ( Companies Mentioned: ABRA.TSX.V, ADT:ASX; 3FN:FSE, AVU:TSX.V; AVPMF:OTC; 8AM:FSE, ECR:TSX.V, GLDC:TSX.V; MARFD:OTCQB, FWZ:TSX.V, FMC:TSX.V, GRG:TSX.V; GARWF:OTCQB; G6A:FSE, KORE:TSX.V; KOREF:OTCQB , QRC:TSX.V, RLYG:TSX.V, TML:TSX: TSRMF:OTCQB, ) from https://www.streetwisereports.com/article/2020/10/22/13-junior-mining-companies-followed-by-the-critical-investor.html Source: Clive Maund for Streetwise Reports 10/22/2020 Technical analyst Clive Maund charts silver and explains why he believes it is one of the best investments for these times.With hyperinflation looming, silver has to be one of the best investments of these times, especially as it leverages gold's gains. This summer saw a spectacular high volume breakout from the giant base pattern that had been forming for years, as we can see on its latest 13-year chart, which is hardly surprising considering the Fed's white hot money creation. The breakout triggered a sharp run up that resulted in silver becoming heavily overbought in a zone of quite strong resistance, hence the reaction since early August, which is setting it up for the next big run.
Originally published on CliveMaund.com on October 18, 2020. Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts. Sign up for our FREE newsletter at: www.streetwisereports.com/get-newsDisclosure: Charts provided by the author. CliveMaund.com Disclosure: from https://www.streetwisereports.com/article/2020/10/21/silver-minor-dip-possible-before-2nd-major-upleg-starts.html |